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2017 DIGILAW 1615 (SC)

Commissioner of Customs v. Magus Metals P. Ltd.

2017-10-25

NAVIN SINHA, RANJAN GOGOI

body2017
ORDER : CIVIL APPEAL NO. 5720 OF 2008 The challenge in the appeal is against the Order dated 04.04.2005 passed by the Customs, Excise and Service Tax Appellate Tribunal, South Zonal Bench at Bangalore (hereinafter referred to as the 'Tribunal') disposing of nine appeals filed by the respondents herein viz., Appeal Nos. C/281/02, C/282/02, C/283/02, C/275/04, C/273/04, C/274/04, C/493/04, C/494/04 and C/495/04. Appeal Nos. C/275/04, C/273/04, C/274/04, C/493/04, C/494/04 and C/495/04 have been allowed on the ground that the impugned show cause notice issued under Section 28 of the Customs Act (hereinafter referred to as 'Act') was time barred and no case for invocation of extended period of limitation provided by Section 28 of the Act was made out. The remaining three appeals i.e., Appeal Nos. C/281/02, C/282/02 and C/283/02 have been allowed on merits interfering with the order dated 21.08.2002 passed by the Adjudicating Authority viz., Commissioner of Customs, Hyderabad, holding the imported goods to be hazardous waste and not copper concentrate and, therefore, liable for confiscation, destruction and for imposition of penalty. 2. The brief facts that will be required to be noticed for the purposes of present appeal are as follows: 3. In the years 2000 to November, 2001, 18 different consignments of Copper Concentrate were imported by the respondent-M/s. Magus Metals (P) Ltd., which were duly cleared on being certified by the Chemical Examiner, Chennai, certifying the same to be Copper Concentrate. Two more consignments were imported on 24.12.2001 and 24.01.2002. It appears that three samples from the said consignments were taken by the Revenue and the respondent claims that while one sample was handed over to it, the remaining two were sent by the Revenue for analysis to Environment Protection Training Research Institute (hereinafter referred to as 'EPTRI') and National Mineral Development Corporation (hereinafter referred to as 'NMDC'). It appears that the reports of the aforesaid two bodies so far as the samples sent by the Revenue is concerned were adverse to the respondent-importer whereas the respondent claims that the sample received by it was also sent for analysis to the EPTRI and the opinion rendered was in its favour. Thereafter, on the basis of the aforesaid reports, Show Cause Notice dated 16.04.2002 was issued proposing confiscation and imposition of penalty under the Act. Thereafter, on the basis of the aforesaid reports, Show Cause Notice dated 16.04.2002 was issued proposing confiscation and imposition of penalty under the Act. The aforesaid Show Cause Notice was adjudicated by the Commissioner of Customs on 21.08.2002 holding the goods to be hazardous waste and, therefore, liable for confiscation, penalty, etc. The aforesaid order dated 21.08.2002 was assailed in appeal before the learned Tribunal. 4. It appears that on 18.03.2003, further Show Cause Notices were issued by the DRI, Chennai, and also by DRI, Hyderabad, in respect of the earlier 18 consignments which were cleared by the respondent-importer. The said Show Cause Notices were based on the subsequent report of the EPTRI and NMDC in respect of the samples taken from consignment dated 24.12.2001 and 24.01.2002. It appears that both the Authorities, adjudicating the Show Cause Notices confirmed the demand by order dated 29.03.2004 (Commissioner of Customs, Hyderabad) and 23.09.2004 (Commissioner of Customs, Chennai). Both the orders were assailed by the respondent-importer by filing appeals before the learned Tribunal. It is in the aforesaid facts that the learned Tribunal was in seisin of the nine appeals referred to above. 5. We have heard learned counsels for the parties. We have considered the impugned order as well as the orders of the Adjudicating Authority and the reports submitted by EPTRI and NMDC in respect of the samples sent by the Revenue as also the report submitted by EPTRI in respect of the sample sent by the importer-respondent. 6. Insofar as the order of the learned Tribunal holding the Show Cause Notice dated 18.03.2003 to be time barred in the six appeals referred to above, we do not find any error in the order of the Tribunal and its conclusions in arriving at the said conclusion. The 'normal' period of limitation for issuing a Show Cause Notice under Section 28 is one year from the due date and unless there is suppression of facts or misstatement, the extended period of limitation will not be attracted. In the present case, the Show Cause notice dated 18.03.2003 in respect of the earlier consignments, admittedly, is beyond one year. Such notice beyond the normal period of limitation could have been issued only if there have been suppression of facts. In the present case, the Show Cause notice dated 18.03.2003 in respect of the earlier consignments, admittedly, is beyond one year. Such notice beyond the normal period of limitation could have been issued only if there have been suppression of facts. If, from the Show Cause Notice dated 16.04.2002 and the report of the EPTRI and NMDC in respect of the samples from the consignments dated 24.12.2001 and 24.01.2002, the Revenue was already in the know of the relevant facts, it is difficult to understand as to how the Revenue could have the benefit of anything but the “normal” period of limitation to issue the Show Cause Notices dated 18.03.2003. The order of the learned Tribunal insofar as the six appeals are concerned, holding Show Cause Notices issued therein to be time barred and interfering with the adjudication orders dated 29.03.2004 and 23.09.2004, therefore, must have the approval of this Court. 7. This will take the Court to the consideration of the remaining three appeals, i.e., Appeal Nos. C/281/02, C/282/02, C/283/02. We have considered the reasoning of the learned Tribunal leading to the ultimate conclusion that the appeal of the importer-respondent before the learned Tribunal should be allowed. 8. Though we may not fully agree with the reasoning of the learned Tribunal on the aforesaid score, however, our ultimate conclusion is in accord with what has been held by the learned Tribunal though for different reasons. 9. The report of the EPTRI and NMDC which forms the basis of the Revenue's case against the importer, in our considered view, is not conclusive. From the report of the EPTRI itself, it appears that the said Body has stated in its report that “Comprehensive analysis for all the relevant parameters could not be performed on the sample due to insufficient quantity of sample”. 10. Insofar as the report of NMDC is concerned, the learned Tribunal in its order had recorded the conclusion that “the NMDC report is not very conclusive to hold that the impugned goods have not originated from naturally occurring copper”. 11. That apart, from the memo of appeal filed by the importer before the Tribunal, we find categorical averments that three samples were taken from the consignments in question and one portion was handed over to the importer while the other two were sent to EPTRI and NMDC. 11. That apart, from the memo of appeal filed by the importer before the Tribunal, we find categorical averments that three samples were taken from the consignments in question and one portion was handed over to the importer while the other two were sent to EPTRI and NMDC. It is the further case of the importer that the sample received by it has also been sent to the EPTRI for analysis and report thereof has been obtained which is to the effect that the item is not an hazardous material but is a Copper Concentrate with the quantities of lead and cadmium being below the prescribed limit. The aforesaid point was raised before the Adjudicating Authority by the importer which contention was brushed aside by the Adjudicating Authority in its Order by observing that it is not known from where and on which date, the samples were received or sent to the EPTRI by the importer. From the materials on record, particularly, the cross examination of the Officer of the importer company, it appears that it had been the case of the importer that such sample was indeed sent to the EPTRI. No materials have been brought on record by the Revenue to enable the Court to take a contrary view in the matter. 12. In the aforesaid facts, we are of the view that the order of the Adjudicating Authority that the samples from the consignments dated 24.12.2001 and 24.01.2002 are hazardous waste and not Copper Concentrate is open to serious doubt, the benefit of which must go in favour of the importer in the light of the totality of the materials on record. We, therefore, sustain the order of the Tribunal insofar as Appeal Nos. C/281/02, C/282/02 and C/283/02 are concerned, though our reasons for the said conclusion are somewhat different. 13. Consequently, and for the aforesaid reasons, we dismiss the appeal of the Revenue and confirm the order of the learned Tribunal. 14. There is a yet another dimension to the case. By an interim order dated 25.11.2016 of this Court, the subject goods have been released subject to furnishing of Bank Guarantee of Rs.10 lakhs on account of demurrage charges. We are told that the goods have since been released. 14. There is a yet another dimension to the case. By an interim order dated 25.11.2016 of this Court, the subject goods have been released subject to furnishing of Bank Guarantee of Rs.10 lakhs on account of demurrage charges. We are told that the goods have since been released. The liability of either of the parties to the present lis to pay the demurrage charges is an issue that does not directly arise for consideration in the appeal and the said question must be left open for adjudication in the normal course. However, as the respondent-importer had cleared/obtained release of the goods on furnishing of the Bank Guarantee of Rs.10 lakhs in favour of the Central Warehousing Corporation in terms of the interim order of this Court dated 25.11.2016, we are of the view that the Corporation should be allowed to invoke the Bank Guarantee of Rs.10 lakhs. Any further claim of the Corporation or any denial of any liability by the importer or the Customs Department, if raised, will be liable to be adjudicated in accordance with law. CONTEMPT PETITION (CIVIL) NO. 456 OF 2014 15. In view of the order passed in Civil Appeal No. 5720 of 2008, the contempt petition stands disposed of.