KUSUM ALLOYS LTD. Vs. COMMISSIONER OF CUSTOMS, BANGALORE

JUDGEMENT

(1.) THESE appeals arise before us for the second time. Facts of the case briefly are, following investigation conducted by officers of DRI on receipt of intelligence, it transpired that M/s. Kusum Alloys Ltd., Bangalore (KAL for short) had imported MS scrap under Notification No. 203/92 -Cus., dt. 19 -5 -1992 and under Notification No. 83/90 -Cust. dt. 20 -3 -1990 also after it had closed down its manufacturing facility. On 28 -5 -1994, at the time of visit of the officers, the Managing Director of KAL Shri Atma Ram Kejriwal (ARK for short) estimated the stock of imported and indigenously procured scrap in stock which showed shortage in comparison to stock as per records. 681 MTs of MS scrap imported under DEEC scheme availing exemption under Notification No. 203/92 -Cus., dt. 19 -5 -1992 was gathered to have been cleared to a fictitious firm viz. M/s. Goodwill Enterprises, Bangalore (GWE). Another quantity of 1029.60 MTs of MS scrap imported paying concessional rate of duty under Notification No. 83/90 -Cus., dt. 20 -3 -1990 was cleared to M/s. Unitility Alloys (P) Ltd. in the name of M/s. King Steels, M/s. Sagar Steels, etc. After due process, the Commissioner passed the impugned order confirming demand of following amounts towards inadmissible exemption availed under Notification No. 203/92 -Cus. and Notification No. 83/90 -Cus., ordering confiscation of the imported goods and imposition of penalties on persons concerned with diversion of the goods imported.

(2.) KAL , the assessee, Kumari Prem Kejriwal and S/Shri Athmaram Kejriwal, Ashok Kejriwal and Vivek Kejriwal (the appellants) have assailed the impugned order on various grounds seeking to vacate the order of confiscation and the penalties imposed on the appellants. KAL does not challenge the duty liability confirmed against it. The appeal filed by KAL is limited to challenging the finding of clandestine clearance or imported scrap, import of re -rollable scrap in the guise of melting and the finding of shortage in stock contained in the impugned order. KAL advanced the following grounds: -

(3.) DURING hearing the ld. Counsel for the appellants submitted that it was impossible to ascertain the stock of MS scrap claimed to have been ascertained by visual examination by Shri Athmaram Kejriwal at the time of visit of officers on 28 -5 -1994. The stock was ascertained up to fraction of a MT. This itself showed that the stock ascertained was not reliable and correct. There was no proposal in the show cause notice to confiscate the goods under Section 111(o) of the Act. Order of confiscation of goods, which were not available, was not sustainable in law. Therefore, the order of fine was bad in law. All the penalties were imposed invoking Section 112(a) of the Act. These penalties were not sustainable as there was no allegation of their having rendered any imported goods liable for confiscation. The ld. Counsel reiterated that the challenge was limited to orders of confiscation, fine and penalties.