NIRAJ PETRO CHEMICALS LTD. Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) This appeal arises from Order -in -OriginalNo.22/2001 -CAU dated 16.3.2001 passed by Chief Commissioner of Customs, Chennai. The appellants were functioning under EPCG Scheme and it was alleged that they had not complied with the terms of the said scheme in exporting the final product Maleic anhydride manufactured by them in terms of the scheme. It was alleged that they had cleared portion of the goods by exporting under DEEC Scheme which was not mentioned in any of the shipping bills that the exports were made under export obligation under EPCG Scheme. The second allegation against the appellants are that on detailed investigation and scrutiny it was found that the appellant had paid to the supplier of the machinery technical know -how fees which had not been added to the assessable value. On this two points show cause notice was issued. However as pointed out by the consultant that the show cause notice does not refer to Section 28 of the Act but refers only to Section 111(m) and 111 (o) of the Customs Act. However the Chief Commissioner has proceeded to order for confirming of demands in terms of Section 28 of the Customs Act for adding the know -how/basic engineering fees in the assessable value in terms of proviso to rules of Customs Valuation (Determination of Price of Imported Goods). There is a imposition of penalty under Section 114(A) of the like sum of duty computed to Rs. 3,09,37,018. The benefit of exemption Notification No. 160/92 dated 20.4.92 has been denied and have confirmed duty demand of Rs. 4,36,37,340 alongwith 24% interest. The goods which were imported under EPCG licence has been ordered for confiscation under Section 111 (o) and Section 111(m) of the Customs Act. However, the goods have been allowed to be redeemed on payment of fine of Rs. 25.00 lakhs under Section 125 of the Act and a personal penalty of Rs. 5.00 lakhs has been imposed under Section 112(a) of the Customs Act.

(2.) The appellants have raised the following grounds against the impugned order:

(3.) It is their grievance that all the points and grounds have not been considered by the Chief Commissioner including the judgment cited and, therefore, the matter has to go back for re -determination. They further pointed out that mandatory penalty under Section 114A is not imposable as the said Section came into force on 28.9.96 while the import had taken place during August 1992. In this regard the following judgment had been relied: