MMTC LTD. Vs. CC (EXPORTS)

JUDGEMENT

(1.) THE appellant (Metal and Mineral Trading Corporation Limited (MMTC)) challenges the order made by the Commissioner (Exports) on 23.12.2003 confirming the demand of Rs. 84,18,550/ - in respect of 23 kgs. of gold which was imported by the appellant and transferred to M/s Bhola Ram Girdhari Lal (BRGL) but which was not utilized for discharge of export obligation in terms of the notification No. 177/94 -Cus.

(2.) THE appellant had as per the scheme formulated under para 88 of chapter 8 of the EXIM Policy of 1992 -97 imported gold for supply to the approved gold jewellery manufacturing units in Export Processing Zone (EPZ) and Domestic Tariff Area (DTA). The appellant was free to supply gold to such unit on loan or outright sale basis subject to the condition that the export of jewellary, made out of such gold was made within three months from the date of such loan or sale.

(3.) THE appellant had given gold on loan basis to M/s BRGL during 08.07.1994 to 05.12.1994 under its "associate scheme" for export. The amount of custom duty involved in respect of such gold was Rs. 84,18,550/ -. By its letter dated 21.06.2005, the appellant informed the Assistant Commissioner of Customs, NEPZ that the time limit for export of 23 kgs. of gold loaned to M/s BRGL had expired and that the unit was not functioning satisfactorily and had failed to fulfill the export obligation under the MMTC gold loan scheme. Thereafter, during the stock verification conducted on 29.6.95 it was found that the entire quantity of 23 kgs. of gold was missing from the unit. In its statement, the Prop, of the unit Shri Girdhari Lal stated that he had taken the said 23 kgs. gold out of NEPZ without permission of the Customs and that he had used it for manufacture of jewellery. Out of the said 23 kgs. gold, 15 kgs. was exported from his DTA unit through MMTC and 8 kgs. was given to one Shri Rajindra Prashad Soni, Prop. of Shashi Jewellers from whom he had taken gold on loan basis. In his statement dated 28.07.1995 Shri Girdhari Lal admitted that his DTA unit had defaulted in exporting gold jewellery out of the gold received from MMTC on loan basis and the default was covered up by exporting gold jewellery made out of the duty free gold i.e. the said 23 kgs. of gold received from the appellant for his NEPZ unit.