ULTRATECH CEMENT LIMITED Vs. COMMISSIONER OF CUSTOMS, JAMNAGAR

JUDGEMENT

(1.) ALL these appeals are directed against the order -in -original dated 31 -12 -2005 vide which the adjudicating authority confirmed the demand of duty and imposed penalties ordered for confiscation of the imported coal, but an option for redemption was given. Since all these appeals arise out of the same order, these appeals are being disposed off by a common order.

(2.) THE relevant facts that arise for consideration are that the appellant M/s. Ultratech Cement Ltd., (UCL) are manufacturers of cement/cement clinker and are also exporter of the cement clinker/cement. Another appellant M/s. Narmada Cement Company Ltd., (NCCL) is also manufacturer of clinker/cement and is a subsidiary of UCL. Other two appellants are employees of both the companies. UCL applied and got various advance licenses under advance license scheme for import of duty free coal and use the said coal for manufacture of clinkers/cement for export as per the obligation given by them while procuring the advance licenses. The import of the coal was done as per the Standard Inputs and Output Norms (SION) and were cleared from the port under notification No. 43/02 -Cus., dated 19 -4 -2002, as amended from time to time. Appellant UCL utilized the duty free imported coal for the manufacture of final products and exported the same. In addition to the consumption in their own factory, appellant UCL dispatched such duty free imported coal to their subsidiary NCCL for manufacture of clinker/cement based on an agreement. As per the terms and conditions of the agreement NCCL was to utilize the duty free imported coal for the manufacture of clinkers/cement and supply the same to UCL for further export only. As per the terms and conditions the imported coal was transferred and debit notes were raised on cost basis without addition of custom duty or profit for accounting purposes and the clinker/cement was transferred to UCL for further export. A show cause notice was issued to the appellants on the following allegations :

(3.) THE learned advocate appearing on behalf of all the appellants submits that the adjudicating authority has erred in passing the order. It is his submission that duty free coal imported by UCL was utilized by them for the manufacture of the clinker/cement. It is his submission that all the documents like ARE 1, Invoices etc issued by NCCL clearly indicate UCL as the exporter and the documents all show NCCL as a supporting manufacturer. It was also submitted by the advocate that the advance licenses under which the duty free imports were made, most of them were redeemed and few have been submitted for redemption to the authorities. It is his submission that if there were no exports done by the appellant then the DGFT authorities would not have redeemed the licenses and would have taken penal actions and informed the customs authorities. It was also submitted that it is an admitted fact that the duty free coal imported has been utilized in the manufacture of clinker/cement as there is no allegation in the show cause notice that the said coal has been diverted in to local market. He also submitted that the adjudicating authority has not given the details of the compilation made by the authorities as regards to the figures of export, as mentioned in the order. He submits that the adjudicating authority has not considered the exports made by mentioning the file No. on the export documents. It is his submission that if the reconciliation is done then there would be no demand of the duty as the export obligations have been met by UCL. He submits that the decision of the tribunal in the case of Tetra Pak India Ltd. [2005 (190) E.L.T. 257] will squarely cover the issue on the interpretation of the clause (vii) of the Notification No. 43/97 -Cus. as amended. It is his submission that the transaction between UCL and NCCL is not a sale or purchase transaction as envisaged in the notification. It is his submission that NCCL has been registered with the DGFT authorities as supporting manufacturer subsequently. It was also submitted that there was no difficulty in getting the name of NCCL registered as a supporting manufacturer as the appellant is manufacturer exporter and hence is eligible for the getting the finished goods manufactured from a supporting manufacturer. He submits that the imports of duty free coal were made in 2002 -03 and hence the show cause notice issued on 18 -6 -2005 is blatantly time barred. On these grounds he submits that the impugned order is to be set aside and their appeal allowed.