PALCO METALS LTD. Vs. COMMISSIONER OF CUSTOMS, AHMEDABAD

JUDGEMENT

(1.) AS per the facts on record, appellant filed shipping bill dt. 13 -5 -2003 under DEPB scheme for export of Aluminium casting declared the value of the same as Rs. 37,19,711/ -. The description given in the bills was as Pressure die cast articles of Aluminium, which attracted DEPB benefit under entry 61(8). The samples taken out of the consignment was got tested and metal content was found to be 85% only. The Revenue entertained a view that the castings in question cannot be considered to be articles of Aluminium inasmuch as the Aluminium content was only up to 85%, the balance being extraneous material, they clarified the matter with DGFT authorities, who opined that DEPB benefit can only be extended to the items made of Aluminium only and not of Aluminium alloys. As per the instructions contained in the Metal Export Policy, the DEPB benefit was available to export products having extraneous metal up to 5% by weight.

(2.) THE above facts when brought to the notice of the appellant, the appellant informed the authorities that their buyer has cancelled the order and they want to take the consignment back to town.

(3.) THE Revenue also entertained doubt about the correct declared price of the goods in question. As per the Department, market enquiries revealed that the price of such products range between Rs. 100/ - to Rs. 200/ - per kg. whereas in the instant case, the price worked out to be Rs. 981.57 per kg. On the basis, a show cause notice was issued to the appellant proposing denial of DEPB claim, confiscation of the goods and for imposition of penalty. On culmination, benefit of DEPB was denied, goods were confiscated with an option to the appellant to redeem, the same on payment of redemption fine of Rs. 3,50,000/ - and penalty of Rs. 1 lakh stands imposed under the provision of Section 114(1) of the Customs Act, 1961. The said order passed by Jt. Commissioner was upheld by the Commissioner (Appeals). Hence the present appeal. Inasmuch as the goods do not stand exported, the appellants claim, of DEPB benefit has become infructuous. As regards the question of confiscation, the Revenues case is that there is mis -declaration on the part of the assessee. As regards the description, we find that appellant has described the goods as Pressure Die Cast Articles of Aluminium, without indicating any percentage of the same. As per the appellant, the goods contained minimum 95% of Aluminium as the same was manufactured from Aluminium, ingot containing 97 to 98% of Aluminium. The test report is only to the effect that the goods did not contain more than 85% Aluminium without disclosing as to what was the balance 15% materials. Even otherwise it stands contended before us that Aluminium alloy containing more than 85% Aluminium also falls under Chapter 76 and is required to be considered as goods of Aluminium. Inasmuch as the entry against heading 61(8) does not use the expression only or exclusively after the description as Pressure Die Cast Articles of Aluminium the appellant cannot be charged with mis -description of the goods when the goods were made of aluminium and there was no extraneous material like plastic or anything else. As regards price, the appellant has taken a categorical stand that the basis of allegation of over valuation is the market enquiry conducted by the Revenue, which does not stand supplied to them. As such, no such enquiry can be adopted for arriving at a different price. As against above the appellants have placed on record invoices showing that more or less identical goods attracted much higher price ranging from Rs. 216 to Rs. 2333/ - per kg. and inasmuch as the price of such type of goods depends upon the quality of the material used, they cannot be compared with the other prices. As such, they pray for setting aside the confiscation and imposition of penalties.