SANGHI INDUSTRIES LTD. Vs. COMMISSIONER OF CUSTOMS, KANDLA

JUDGEMENT

(1.) THESE appeals have been filed by M/s. Sanghi Industries Limited, Sanghipuram, Kutch (main appellant) and Shri Alok Sanghi (Director of the main appellant) against the O -I -O No. KDL/Commr./30/10 -11, dated 30 -3 -2011, issued on 5 -4 -2011. Under this order, the adjudicating authority has held the classification of Magensia Spinel Bricks, imported by the main appellant are required to be classified under CTH 6902 10 90, as other bricks and not under CTH 6902 10 10 and accordingly denied the benefit of Notification No. 90/2004 -Cus., dated 10 -9 -2004 and Notification No. 40/2006 -Cus., dated 2 -5 -2006. A demand of Rs. 1,51,62,779/ - has been confirmed against the main appellant, along with interest under Section 28AB of the Customs Act, 1962. An equivalent amount of penalty of Rs. 1,51,62,779/ - is also imposed upon the appellant under Section 114A of Customs Act, 1962. Shri Alok Sanghi, the other appellant, has been visited with a penalty of Rs. 5 lakh under Section 112(a) of Customs Act, 1962.

(2.) SHRI T. Vishwanathan (Advocate) and Shri Anand Nainawati (Advocate) appeared on behalf of the appellants. Shri T. Vishwanathan argued that main appellant is using imported Magensite Refractory Bricks and also indigenously procured Aluminium Bricks in their cement plant for providing protective lining to the kilns against high temperature and chemical reactions. That as per SION A 1050 and A 1030 main appellant imported, inter alia, Magnesite Refractory Bricks after discharging export obligations under DFIA/DFRC schemes. That during the period 2005 -06 to 2009 -10, main appellant imported Magensia Spinel Bricks by declaring the classification of the imported goods under CTH 6902 10 10 as these imported Magensia Spinel Bricks are also a category of Magnesite Refractory Bricks. It was his case that D.G.F.T. has not initiated any action against the appellants alleging any misuse of DFIA/DFRC schemes. That appellant used two types of refractory bricks namely Magnetic Refractory and Alumina Bricks. That only Magnetic Refractory Bricks are imported under DFIA/DFRC schemes under Notification No. 90/2004 -Cus., dated 10 -9 -2004 (DFRC) and Notification No. 40/2006 -Cus., dated 2 -5 -2006 (DFIA) and the Refractory Bricks imported by them were correctly classified under CTH 6902 10 10. That the present proceedings have been directed against the appellants on the grounds that goods imported are classifiable under CTH 6902 10 90 and not eligible to benefit under the above exemption notifications. That the appellants are actual users and goods have been imported under DFIA/DFRC scheme only after discharge of export obligations. That DFIA/DFRC scheme permit import of all the inputs used in the manufacture of export goods, as per SION Sr. No. A 1050 reproduced below, prescribed by Foreign Trade Policy Norms (Duty Exemption Scheme).

(3.) SHRI G.P. Thomas (A.R.) appearing on behalf of the Revenue argued that the classification of the imported goods has been correctly made by the adjudicating authority under CTH 6902 10 90 as other bricks and demands/penalties have been correctly confirmed/imposed upon the appellants.