MMTC LIMITED Vs. COMMISSIONER OF CUSTOMS, NEW DELHI

JUDGEMENT

(1.) THE appellant is a public sector undertaking of the Government of India. Under the Export and Import Policy of the Government, as framed from time to time, schemes were formulated whereby jewelry manufacturing units were permitted to import primary gold of 0.995 fineness for the purpose of manufacture and export of gold jewellery, subject to certain value addition norms. Such units were permitted to set up manufacturing facilities within the specified export processing zones (for short "EPZ") or in special export oriented complexes subject to these units being 100% export oriented units (in short "EOUs").

(2.) PURSUANT to the above scheme, a number of manufacturers / exporters set up units in the Noida EPZ. Under the scheme, the appellant was a nominated agency which could also import goods including gold for supply of the same to exporting units of the EPZ for manufacture and export as per terms and conditions of the EXIM Policy and as per Notification No. 177 of 1994 which granted exemption from payment of duty on goods such as raw materials, components, etc. imported into India by gem and jewellery units for manufacture of gems and jewellery for export out of India or for the promotion of export of gems and jewellery, subject to certain conditions. Notification was also made applicable to silver and gold imported by the appellant and State Bank of India for being supplied to gem and jewellery units in EPZ under the scheme for export of gold and silver jewellery and articles.

(3.) THE show - cause notices were issued proposing recovery of customs duty from the appellant, imposition of penalty as well as penal action against the four units. For the years 1991-1996, the gold was imported for EPZ at Jhandewalan and 1996-1998 for the EPZ at Noida. The Commissioner of Excise and Customs confirmed the demand for the gold imported in the year 1992-1997 at Rs 34,80,000, Rs 29,61,750, Rs 36,74,598.35p. and Rs 29,00,000 relating to the gold supplied to M/s Amit Jewellers, M/s Goldex, M/s Zavart Overseas and M/s Unique Jewellers respectively. Four separate adjudication orders were passed and the Commissioner also imposed penalty of Rs 5,00,000, Rs 2,00,000, Rs 10,00,000 and Rs 2,00,000 respectively. For Jhandewalan EPZ, the duty demand of Rs 7,07,01,428 was dropped by the Commissioner, against which the Department filed appeal before the Tribunal. The appellant also preferred four appeals before the Tribunal relating to Noida EPZ for which the demand was confirmed.