JAI INDUSTRIES Vs. COMMISSIONER OF CUSTOMS, MUMBAI

JUDGEMENT

(1.) THESE are three appeals filed by M/s. Jai Industries, Hyderabad (Appeal No. C/1345/98 and No. C/1470/98) and Mr. Omeshwar Baldawa General Power of Attorney holder of M/s. Jai Industries (Appeal No. 1346/98) against the Order -in -Original Numbers 153 -154/98 CAC/CCE -Admn., dated 14 -7 -1998.

(2.) SHRI R. Sashidharan, Senior Advocate along with Shri M.S. Rajappa, Consultant appeared on behalf of the appellants and Shri M.K. Madhyastha DR appeared for Revenue.

(3.) SHRI R. Sashidharan learned Senior Advocate pleaded that M/s. Jai Industries had imported Polyol and Toluene Di -Iscocynate (TDI) by availing benefit of Notification No. 72/91 -Cus., dated 25 -7 -1991 as amended. This Notification provides for concessional rate of Customs duty at the rate of 35% ad valorem in respect of Polyol and Iscocynate if the same are utilized in the manufacture of Polyurethane footwear soles subject to compliance of the conditions as mentioned in the said Notification. M/s. Jai Industries imported Polyol and Toluene Di -Isocynate (TDI) through Hyderabad and Mumbai at concessional rate during the periods from 1991 -1992 to 1993 -1994 and it was alleged that they have not utilised these goods for manufacture of Polyurethane foam footwear soles but manufactured polyurethane foam sheets. They obtained end -use certificate by collusion/forgery and claimed discharge of end -use obligation cast on them. The DRI conducted investigation and found that by not manufacturing the polyurethane footwear soles, M/s. Jai Industries have evaded customs duty of Rs. 1,45,80,497/ - for the clearances of the imported polyol and Iscocynate from Mumbai and also evaded duty of Rs. 1,18,57,397/ - for imports at Hyderabad. Therefore show cause notices were issued to them for recovery of duty short -paid i.e. Rs. 1,45,80,497/ - for imports through Mumbai and Rs. 1,18,57,397/ - for imports through Hyderabad. The entire duty demanded was confirmed by the Commissioner of Customs (Adjn.), New Custom House Mumbai under the impugned order wherein he confirmed the total duty of Rs. 2,63,83,693/ - and imposed a penalty of Rs. 2 crores on M/s. Jai Industries and 2 crores on Omeshwar Baladwa and Rs. 10 lakhs on Shri Mangaiah.