SPK IMPEX Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) THE instant appeals have been filed by M/s. SPK Impex, M/s. Global Metals and S/Shri K. Saminathan, K.C. Sahney, P.R. Venkatraj, Venkatachalam and T.M. Vijayan. In the impugned order the Commissioner has decided that 1914.256 M.Ts. of scrap imported by M/s. SPK Impex (henceforth also SPK or EOU), an EOU, had been imported and cleared in violation of Letter of Permission(LOP) and manufacturing licence as the items imported were found not to conform to the description of items allowed as per LOP/Inbond manufacturing licence. The Commissioner denied the benefit of Notification No. 53/97 CUS dated 03/06/97, extended at the time of import to a quantity of 1609.326 M.Ts scrap cleared under various Bills of Entry by SPK. He thus demanded duty of Rs. 1,64,80,526/ - on 1156.326 M.Ts of mixed metal scrap. He also demanded Rs. 64,56,373/ - being duty on 453 MTs of scrap lying in the EOU. He ordered confiscation of 1609.326 MTs of scrap out of which 453 MTs had been seized, the remaining being not available for confiscation. The Commissioner ordered SPK to pay Rs. 30 lakhs in lieu of confiscation of 1156.326 M.Ts. of scrap and a fine of Rs. 10 lakhs in lieu of confiscation 453 M.Ts. of mixed metal scrap under seizure. He rejected the declared value of scrap covered by the following six Bills of Entry:

(2.) A penalty of Rs. 10 lakhs was imposed on Shri Saminathan and M/s. SPK Impex under Section 112(a) of the Customs Act and another penalty of Rs. 1,64,80,526/ -under Section 114A of the Customs Act, 1962. Interest on the duty was also demanded The following penalties were also imposed in the impugned order on various persons under Section 112(a) as follows:

(3.) THE facts of the case in brief are that M/s. SPK Impex, Valasaravakkam, Chennai had imported and cleared 1914.256 M.Ts. of mixed metal scrap under 77 Bills of Entry and also imported 15 containers of metal scrap in the years 2001 and 2002. The allegation based on intelligence was that M/s. SPK Impex underdeclared the quantum of copper, brass and aluminium scrap in the guise of mixed metal scrap and diverted them to DTA without payment of duty and that the mixed metal scraps had not been allowed to be imported by SPK as per LOP. It was also alleged that the 461 MTs of waste had been falsely claimed to have been generated and destroyed whereas only a small quantity of waste had been generated. It had been proposed to refix the value and to demand duty in respect of mixed metal scrap imported and to confiscate 453 M.Ts. seized from the EOU on the ground of misdeclaration of value, description etc. It was also proposed to confiscate the metal scrap awaiting clearance.