Wilful suppression and misstatement in job work exports using wrong scheme code justifies extended limitation under Section 28(4) and substantial pre-deposit; prior rulings inapplicable if facts differ.

JUDGMENT :

Dr.G.JAYACHANDRAN, J.

1.C.M.A.No:1162 to 1164 of 2014 are by (i) M/s A.P.P. Enterprises; (ii) Mr.Vinod Agarwal, Partner, M/s A.P.P. Enterprises; and (iii) Mr.Dwaraka Prasad Parekh, Partner, M/s A.P.P. Enterprises respectively.

2. M/s A.P.P. Enterprises, having its registered office at Delhi is a Partnership Firm run by Mr.Vinod Agarwal and Mr.Dwaraka Prasad Parekh, as its Partners. At its factory in Haryana for conversion of ‘Areca nuts/Betel nuts’ into ‘Betel Nut Tannin’ as a job work imported huge quantity of Areca nuts/Betel nuts from their foreign supplier M/s P.T.Ganpathi Trading Indonesia. It declared that on conversion into ‘Betel Nut Tannin’, the same will be exported to the supplier at Indonesia and availed the duty free concession under the Notification No:32 of 1997, dated 01.04.1997.

3. As per the Customs Department Notification No:32 of 1997, to avail the concession, the importer has to ensure the following conditions:-

“(i)that the goods are imported for execution of an export order placed on the importer by the supplier of the goods for jobbing.

(ii)that the goods so imported, including resultant products, are re-exported to the supplier of the goods or to any other person which the said supplier may specify within six months, provided that the wastage arising during the process of jobbing, as determined in terms of SION norms published vide P.N.No.2(P.N)/1997-2002 and to where such SION norms for resultant product has not been published, the satisfaction of Asst.Commissioner of Customs or Deputy Commissioner of Customs and Central Excise shall be disposed off in the manner as may be specified by them.

(iii)that the goods are utilized only for the discharge of export obligation and no part there of shall be sold, loaned, transferred or otherwise used or disposed off.

(iv)that the jobbing is undertaken in accordance with the procedure set out in the Customs (import of goods at concessional rate of duty for manufacture of Excisable goods) Rules 1996.

4. Based on information and reasonable belief that the areca nut/betel nut imported were diverted for manufacturing Pan Masala/Gutka for local consumption, instead for the job work and export of ‘Betel Nut Tanning’ in contravention of the Notification condition (iii) read above, SIIB, Chennai Customs took up the matter for investigation of the past imports.

5. Show Cause Notice dated 20/03/2008 was issued in respect of 144 Bills of Entry. Order-in-Original No:9652 of 2009 was passed on 17/09/2009. Stay petition Nos:203 to 205 of 2012 were disposed of on 07.03.2012 for not complying the condition. Final Order No:513 to 515 of 2012 by CESTAT was passed on 09.05.2012.

6.The Team of Investigating Officers of Customs Department visited the factory of the importers to examine the process of conversion of betel nuts into tannin. The 144 consignments of areca nuts/betel nuts of assessable value of Rs.19.80 crores were not even reaching to the factory premises for job work, but diverted for manufacturing pan masala/gutka in and around, New Delhi. However, under Notification No.32/97, the duty forgone against 144 bills of entry works out to Rs.20,12,62,829/-. To account the diverted potion of the betel nuts, the importers have claimed 80% of wastage and the same was destroyed, on the permission of the Assistant Commissioner of Central Excis