Jhoola Refineries Limited Vs Commissioner of Central Excise (CESTAT Allahabad)
Undisputedly, the bills of entry in this case were not assessed by the officers of DRI but by the officers of the Custom house. Only that officer who has assessed the Bills of Entry in the first place or his successor in office was ‘the proper officer’ who, if he was subjectively satisfied that some duty had escaped assessment, could have issued the SCN. As the SCN has been issued by officer of DRI who is not competent to issue it, the impugned order deciding such an SCN cannot be sustained and needs to be set aside and we do so.
FULL TEXT OF THE CESTAT ALLAHABAD ORDER
These two appeals assail the same order-in-original1 dated 31 July 2008 passed by the Commissioner of Central Excise and Service Tax, Allahabad and hence are being disposed of together along with the miscellaneous applications filed in the two appeals. Miscellaneous application C/Misc/70169/2021 filed in appeal C/725/2008 and miscellaneous application C/Misc/70204/2021 filed in C/790/2008 seek to amend the prayer in the appeals as the prayer in the appeals as originally filed were not clear. We allow the miscellaneous applications and the prayer in both the appeals stand modified accordingly.
2. Appeal no. C/725/2008 has been filed by M/s. Jhoola Refineries Ltd2 ., the importer, assailing the impugned order confiscating the imported crude palmolein oil under Section 111(o), imposing a redemption fine under section 125 of the Customs Act, demanding duty under section 28 along with interest under section 28AB and imposing penalties. Appeal No. C/790/2008 has been filed by Shri M K Jhunjhunwala3, Director of the importer assailing the penalty imposed upon him by the impugned order.
3. We have heard learned counsel for the appellants and learned authorised representative of the department and perused the records. During the period 01/01/2005 to 31/07/2005, Jhoola imported 1,974.713 MT of Crude Palmolein Oil (industrial grade) under various bills of entry by claiming exemption of Notification No 21/2002-Cus dated 01/03/2002 (S.No. 30) as amended by Notification No. 20/2004- Cus dated 16.1.2004 and paid basic customs duty of 20%. This exemption was available to all oils which were of „other than edible grade to be used in manufacture of soap‟ subject to the condition that they follow the procedure under Customs (Import of Goods at concessional rate of duty for manufacture of excisable goods) Rules 1996. According to Jhoola, it followed all the required procedure and it had imported only industrial grade crude palmolein oil and hence it was eligible to the exemption. The Bills of Entry were assessed by the Customs officers giving the benefit of the exemption notification as claimed. Later, officers of Directorate of Revenue Intelligence4 initiated investigations and came to the conclusion that Jhoola was not entitled to the benefit of the exemption and the Assistant Director of DRI issued a Show Cause Notice5 proposing to confiscate the goods, deny the benefit of the exemption notification and recover the differential duty under section 28 along with interest under Section 28AB and impose penalties. This SCN was adjudicated by the Commissioner by the impugned order confiscating the goods, imposing fine and confirming the demand of duty, interest and imposing penalty on Jhoola and also imposing a penalty on Jhunjhunwala. The notification provides exemption to a variety of goods listed in the table therein subject to various conditions. Of these, S.No. 30 of the table (as amended on 16.1.2004) and the condition no. 5 subject to which the exemption for the goods covered by this entry is available are relevant to these two appeals. The relevant part of the notification is reproduced below:
Notification No. 21/2002-Cus. Dated 1.3.2002
Effective rates of basic and additional duty for specified goods falling under chapters 1 to 99
In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962) and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue), No. 17/2001- Customs, dated the 1st March, 2001 [G.S.R. 116(E), dated the 1st March, 2001], the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the goods of the description specified in column (3) of the Table below or column (3) of the said Table read with the relevant List appended hereto, as the case may be, and falling within the Chapter, heading or sub-heading of the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) as are specified in the corresponding entry in column (2) of the said Table, when imported into India,-
(a) from so much of the duty of customs leviable thereon under the said First Schedule as is in excess of the amount calculated at the rate specified in the corresponding entry in column (4) of the said Table;
(b) from so much of the additional duty leviable thereon under sub-section (1) of section 3 of the said Customs Tariff Act, as is in excess of the rate specified in the corresponding entry in column (5) of the said Table,
subject to any of the conditions, specified in the Annexure to this notification, the condition No. of which is mentioned in the corresponding entry in column (6) of the said Table :
Provided that nothing contained in this notification shall apply to –
(a) the goods specified against serial Nos. 239, 240, 241 and 242 of the said Table on or after the 1st day of April, 2003;
(b) the goods specified against serial Nos. 250, 251 , 252 and 415 of the said Table on or after the 1st day of March, 2005.
Explanation. – For the purposes of this notification, the rate specified in column (4) or column (5) is ad valorem rate, unless otherwise specified.
Table
