ROLLWELL FORGE LTD. Vs. COMMISSIONER OF CUSTOMS, KANDLA

JUDGEMENT

(1.) LEARNED advocate on behalf of the appellant submitted the facts of the case as under : The applicant is engaged in manufacturing of various types of Flanges following under Chapter 73 Heading No. 73.07 and is holder of registration certificate under the provisions of CEA, 1944. The applicant is under the control of Superintendent of Central Excise, Range -Shaper (Veraval), Division -II, Rajkot. The applicant is following the procedure prescribed under the provisions of Central Excise Act and the Rules made thereunder. The applicant is regularly exporting Flanges by following the procedure prescribed under the law. Sometimes to meet with the requirement of the customers and to facilitate the requirement of customer, the type of Flanges which could not be manufactured at the factory premises the applicant is importing the Flanges and supplying it to the customer. The applicant is maintaining separate account of the goods manufactured and also procured from our sources. For the goods manufactured, within the factory premises, the applicant at the time of export, prepares Central Excise invoices, ARE -1 etc. but at the time of clearance of the Flanges procured from out sources, does not prepare Central Excise Invoice or ARE -1. The applicant had imported Flanges form Chaina under various Bill of Entry, for the purpose of export and at the time of clearance had clarified, the intention to re -export the same and accordingly re -exported under various Shipping Bills as referred in Para 17.1 of the Show Cause Notice. At the time of re -export, the department had verified each and every consignment and certified to be the same goods as was imported under the respective Bill of Entry and referred in the Shipping Bill. The fact is also established from the certificate given by the concerned officers after examination of the goods and at the time of export. The applicant also intended to re -export the goods imported under Bill of Entry No. 108032, 108038 and 108414 and accordingly presented Shipping Bill No. 1477 and 1013 both dated 16 -10 -2006 and 7 -11 -2006. The goods were examined by the department and after examination came to the conclusion that since imported, goods were not bearing any marking, the goods being exported are not the same goods and therefore, seized the goods and thereafter, allowed export on provisional basis. Meanwhile, the preventive officers visited our factory premises and started investigation. Since the stock of Flanges were not separately available, started recording statement of the workers. While recording the statement, the investigating officers directed them to clarify the manufacturing process and also inquired for identification of the material, which could not be explained by the employees. After recording the statement of the employees, they recorded the statement of the director and forced them to accept the statement of the employees. Thereafter, the director had executed the affidavit and have retracted the statement. After recording statement, department has issued three different show cause notices, proposing the confiscation of goods, rejection of Duty Drawback and imposition of penalty.

(2.) AFTER adjudication proceedings, the seized goods have been confiscated, penalties have been imposed and duty drawback claimed under Section 74 in respect of earlier consignment has also been denied. Hence, the present appeal.

(3.) LEARNED advocate submitted that the whole case of the department is based on the fact that in the invoice, the appellants had mentioned the origin of the goods as Indian whereas the appellants had claimed to the Department that they were actually re -exporting Flanges imported by them as such. He submits that this was done since the purchaser wanted the goods of Indian origin and since they could not manufacture the goods, they had imported the same and were supplying the goods. He also submits that in respect of each and every consignment which were to be exported earlier in respect of which drawback has been denied, the goods were examined at the time of export and the officers have certified that the description of the goods tallies with the description of the goods imported under the relevant bills of entry and therefore there is no justification for imposition of penalty of Rs. 35 lakhs on the appellant for claiming irregular drawback. He also submits that other two consignments which were intercepted by the department on the basis of which follow -up investigations were conducted, are small consignments and in any case, the goods have been allowed to be redeemed on payment of fine and penalty imposed is only about 2.25 lakhs.