Pelican Grani Marmo Pvt Ltd Vs Additional Commissioner (CESTAT Delhi)
CESTAT Delhi held that benefit of the exemption Notification No. 52/2003 is available subject to some conditions, the same is to be strictly interpreted.
Facts- M/s Pelican Grani Marmo Pvt Ltd filed two appeals to assail the order passed by the Commissioner (Appeals), Central Excise and Central Goods and Service Tax, whereby the appeal filed by the appellant was partly allowed two appeals filed the appellant by setting aside the penalty imposed on it under Section 117 of the Customs Act, 1962 and reducing the penalties imposed under section 112(a) and rejected the remaining part of the appeal.
As a 100% EOU, the appellant is entitled to import goods duty free as per Notification No. 52/2003-CUS as amended from time to time. The exemption notification is subject to some conditions including a condition that the appellant executes a bond with a customs authority binding itself to pay on demand an amount equal to duty leviable on the goods and interest at a rate specified by the Notification issued under section 28AB in certain situations.
It appeared to the revenue that the appellant had consumed steel grits/ steel blade at a rate higher than the Standard Input Output Norms. As the appellant had consumed steel grits/ steel blade in excess of the norms, it appeared to the Revenue that the goods which were imported were in violation of the exemption notification and, therefore, were liable for confiscation under section 111(o) of the Act. Accordingly, it was also felt that the appellant was liable for penalty under sections 112 and 117 of the Act.
Conclusion- We find that the appellant claimed the benefit of the exemption Notification No. 52/2003 which must be strictly interpreted because it is available subject to some conditions which will be applicable to all those who claim its benefit.
Held that the appellant is, therefore, liable to pay the duty. Consequently, the appellant is also liable to pay interest as applicable under section 28AB of the Act. Since there was no order of confiscation of the goods in the order, no penalty could have been imposed under section 112. The penalty under section 112 needs to be set aside.
FULL TEXT OF THE CESTAT DELHI ORDER
1. M/s Pelican Grani Marmo Pvt Ltd.1 filed these two appeals to assail the order-in-appeal dated 31.12.2018 passed by the Commissioner (Appeals), Central Excise and Central Goods and Service Tax, Jaipur, whereby he partly allowed two appeals filed the appellant by setting aside the penalty imposed on it under Section 117 of the Customs Act, 19622 and reducing the penalties imposed under section 112(a) and rejected the remaining part of the appeal.
2. The undisputed facts of the case are that the appellant is a 100 % Export Oriented Unit3 and holds customs bonded warehouse licence and manufactures and exports granite slabs. Granite is found as blocks in nature which is cut by the appellant into slabs, polished and exported. As a 100% EOU, the appellant is entitled to import goods duty free as per Notification No. 52/2003-CUS as amended from time to time. This exemption notification is subject to some conditions including a condition that the appellant executes a bond with a customs authority binding itself to pay on demand an amount equal to duty leviable on the goods and interest at a rate specified by the Notification issued under section 28AB in certain situations. One of the situations in which the appellant has to pay duty is as follows;
“In the case of goods other than capital goods, such goods as are not proved to the satisfaction of the said officer to have been used in connection with the production or packaging of goods in accordance with SION for export out of India or cleared for home consumption within a period of three years from the date of import or procurement thereof or within such extended period as the said officer may, on being satisfied that there is sufficient cause for not using them as above within the said period, allow;”
3. It appeared to the revenue that the appellant used or consumed steel grits/ gangs saw blades at a rate higher than the Standard Input Output Norms4, prescribed in the DGFT Hand Book of Procedures volume II at serial number A1833. As the appellant had consumed steel grits/ steel blade in excess of the norms, it appeared to the Revenue that the goods which were imported were in violation of the above condition of the exemption notification and, therefore, were liable for confiscation under section 111(o) of the Act. Accordingly, it was also felt that the appellant was liable for penalty under sections 112 and 117 of the Act. Two show cause notices were issued to the appellant covering the period from 2007-08 to 2011-12 and 2013-14 which were confirmed by the original authority as follows:
