M/s. Chessman Impex Private Limited Vs Commissioner of Customs (CESTAT Chennai)
Summary: CESTAT Chennai allowed seven connected appeals and set aside Order-in-Original No. 54992/2017 dated 28.02.2017, holding that the customs duty demand of Rs.2,16,93,068/- against Chessman Impex Pvt. Ltd., consequential interest, penalties of Rs.20 lakh each under Sections 112(a) and 114(i) of the Customs Act, 1962 and penalties imposed on the co-appellants could not be sustained in the absence of reliable and corroborative evidence. Chessman Impex had obtained a DEEC licence under the EXIM Policy 1997-2002 permitting duty-free import of 5350 MTs of non-alloy re-rollable scrap cuttings against export obligation of 5000 MTs of non-alloy steel bars and rods. Revenue alleged that the imported scrap was diverted in the domestic market and maize was fraudulently exported to Bangladesh under 73 Bills of Export instead of the stipulated steel products.
The Tribunal found material support for the appellant’s case in the special permission for exports through Ghojadanga LCS, Customs examination of export consignments, Central Excise certification of AR-4s/ARE-1s, DRI Chennai’s confirmation regarding manufacture by Goyal Ispat Ltd., the foreign buyer’s permission for segregation and export of unprocessed scrap, undisputed realisation of export proceeds and the Export Obligation Discharge Certificate issued by the competent DGFT authority. Significantly, the CBI had investigated the same alleged fraudulent exports and filed a final report recording that the available evidence indicated that the disputed exports to Bangladesh had actually taken place; the report was accepted by the competent Criminal Court.
