LAWS(MAD)-2012-11-119

COMMISSIONER OF CUSTOMS Vs. SUMANGALA STEELS PVT. LTD

Decided On November 15, 2012
COMMISSIONER OF CUSTOMS Appellant
V/S
Sumangala Steels Pvt. Ltd Respondents

JUDGEMENT

(1.) THE Revenue is on appeal as against the order of the Customs, Excise and Service Tax Appellate Tribunal.

(2.) IT is seen from the orders of the Tribunal that the exporter herein claimed that the goods exported by them were alloy steels and hence, they attracted nil duty. However, based on the intelligence report and the verification of the shipping bills, show cause notices were issued, holding the view that the respondents were exporting non-alloy steel billets, attracting customs duty at 15% as per Notification 66/2008 dated 10.05.2008. Samples were drawn from the seaport consignments and the same were tested in National Metallurgical Laboratory. The report obtained, revealed boron content as less than 0.0008% to indicate that the items in question were non-alloy steel billets misdeclared as alloy steel. Thus the additional Additional Director General, Enforcement Directorate, held that the export goods were liable for confiscation under Section 113(1) of the Customs Act and further the exporter was liable to pay penalty under Section 114/114A of the Customs Act. After receiving the reply, the proposal in the notice was confirmed.

(3.) THE respondent went on appeal once again before the CESTAT, contending that the respondent initially contracted for supply of non-alloy steel on 23.04.2008 to M/s.Al Hussainy factor, Dammam. In the meantime, Notification No.66/08-Cus. came into force effective from 10.06.2008, imposing export duty at the rate of 15% ad valorem on non-alloy steel. Since this amendment made non-alloy steel was costlier than alloy steel, after discussion with the buyer, it was decided that the contract for supply of non-alloy steel would be converted to a contract for supply of alloy steel, with boron content at 0.0008%. The respondent pointed out that as per the customs tariff, steel billets containing boron content of 0.0008% or more are to be classified as alloy steel billets and hence, would be exempted under Notification No.66/08-Cus. dated 10.06.2008. Thus alloy steel billets containing 0.0008% of boron was manufactured and shipping bills containing the description of the said goods was filed along with the test reports issued by M/s.Kidao Laboratories, certifying the consignment as alloy steel containing 0.0008% boron.