(1.) VIDE the impugned order, the Commissioner of Customs has confiscated 20 nos of 16" (400 mm dia) imported Seamless C.S. Pipes seized on 5.6.2003 from trailor trucks en route to M/s. Bombay Metal Works, the purchasers thereof under the provisions of Section 111(o) with an option to redeem on payment of a fine of Rs. 15 lakhs under Section 125, confiscated the trailor trucks with fine of Rs. 1 lakh confirmed a demand of duty of Customs of Rs. 24,67,536/ - on the above goods, against the appellant who had imported 459.20 mtrs. of Seamless C.S. Pipes for execution of Laxmi Field Phase I project for petroleum/gas exploration on behalf of M/s. Cairns Energy Pvt. Ltd., Surat by availing benefit of exemption in terms of Notification No. 21/2002 -Cus., dated 1.3.2002 on the basis of essentiality certificate issued by the Director General of Hydro Carbon, New Delhi as per condition 31 of the Notification and sold goods in dispute as scrap after project confiscation and imposed a penalty of Rs. 5 lakhs on them under Section 112 of the Customs Act.
(2.) CONFISCATION arises for the reason that the goods were not found to be scrap but seamless pipes not utilized for project work, and non -utilization resulted in non -fulfillment of post importation condition in Notification No. 21/2002, giving rise to invocation of Section 111(o); demand confirmation results in denial of benefit in terms of the notification; the extended period of limitation has been involved on account of misrepresentation to Directorate General of Hydro Carbons by the appellants that the entire quantity (including surplus) was required for the project; and penalty has been imposed on the ground to contravention of Section 111(o).
(3.) WE have heard both sides and perused the records. The issue for determination is whether the goods imported in April and September, 2002 are eligible to the benefit of duty free import under Notification No. 21/2002.