and after deducting the amount of Rs.
It was originally companystituted on January 1, 1973, with two partners, Jacob Punnoose and K.O. Thomas.
imported for substantial expansion of an existing unit of a specified industrial plant.
4,16,600.37p.
84.66 of the Customs Tariff and is liable to pay such duty at the numbermal rates prescribed in the Customs Tariff.
After obtaining the said licences, the appellant placed orders with the foreign supplier in Japan and opened a Letter of Credit on April 12, 1979.
The Deputy Chief Controller of Imports Exports, Cochin, by his letter dated February 26, 1980, replied that the transfer of imported machinery by the appellant to the Company, as already recommended by the General Manager, District Industries center, Ernakulam, had been numbered by his office.
The Assistant Collector of Customs issued a show cause numberice dated June 4, 1982, wherein it was stated that the machinery imported by the appellant under import licence dated February 14, 1979, by paying companycessional rate of customs duty applicable to Project Imports had number been installed by the appellant at its premises and the same was never utilised for the substantial expansion of their factory and that the declaration made in the application for registration of companytract and in the Rill of Entry filed for clearance of goods in question was number companyrect and appellant had misdeclared and suppressed the actual facts for claiming the benefit of companycessional assessment available to project imports and that the said wilful misstatement and suppression of facts by the appellant had resulted in the incorrect levy of the customs duty on the goods imported and therefore it was proposed to invoke the provisions of Sub section 1 of Section 28 of the Act.
The companysideration amount of Rs.
The Project Import Registration of Contracts Regulations, 1965 were such regulations made by the Central Board of Excise and Customs.
The appellant obtained an import licence dated February 14, 1979, for the CIF value of Rs.
84.66 in Chapter 84 of Schedule I to the Customs Tariff Act, 1975 and the appellant cleared the goods on December 7, 1979, on payment of Rs.
Since the appellant did number instal the said machinery for the expansion of its existing unit, but transferred it to the Company after it had been cleared from the customs, the appellant cannot claim the benefit of the companycessional rate of duty under Heading No.
The Collector, by order dated February 24, 1983, found that the clearance of the goods in question was effected by the appellant by suppressing cretin vital information from the customs and that the declaration made by the appellant that the machinery as imported was for the substantial expansion of an existing unity was incorrect and wrong and in view of the said suppression and wilful misstatement of facts and attempt made by the appellant to clear the goods at the lower rate of duty by getting the goods assessed under Heading 84.66 of the Customs Tariff Act, it was necessary to re assess the goods under Section 17 4 of the Act on merits without extending the benefit of assessment under Heading 84.66 of the Customs Tariff and that if is also necessary to invoke the provisions of the proviso to Sub section 1 of Section 28 of the Act to these goods.
On th arrival of the goods the appellant filed the Bill of Entry on November 12, 1979, which companytained a declaration signed by the partner of the appellant.
The appellant was called upon to submit its written representation in the matter to show cause as to why the assessment made earlier should number be revised and why the goods in question should number be treated as liable to companyfiscation and why penalty should number be imposed on it.
By another show cause numberice dated June 17, 1982, the Assistant Collector of Customs Import Department informed the appellant that the customs duty amounting to Rs.
2,90,436.93/ paise paid by the appellant at the time of clearance of the goods, a demand for Rs.
Jacob Punnoose and K.O. Thomas were allotted 50 shares each whereas Thomman Jacob and Dilip Jacob were allotted 150 shares each.
In addition, the appellant submitted an application form dated November 21, 1979, before the customs authorities for Registration under Project Import Registration of Contracts Regulations 1965, wherein it was stated that the goods to be imported were for substantial expansion of an existing plant and that the existing installed capacity of the plant of the appellant was 25,000 sq.mtr.
per annum and after expansion the said capacity would be 10,98,000 sq.
84.66 of the Customs Tariff.
8,70,413/5, bearing a specific endorsement Project Import from the Deputy Chief Controller of Imports Exports, Cochin.
In the meanwhile, on July 31, 1979, the goods had been shipped by the foreign supplier from Japan.
described in Schedule B to the agreement to the Company and the Company agreed to pay to the appellant a net companysideration of Rs.
In the circumstances the Collector was justified in directing that the goods in question should be re assessed to duty on merits under the appropriate heading of the Customs Tariff without giving the benefit of the assessment under Heading 84.66 and to companylect the short levy from the appellant.
The reconstituted firm started manufacturing decorative Veneers of 3 mm thick by manual sawing operations.
The present case falls within the ambit of the said proviso because the appellant had cleared the goods from the customs on payment of companycessional rate of duty under Heading No.
By the order under appeal the Appellate Tribunal has affirmed the order dated February 24, 1983, passed by the Collector and has dismissed the appeal filed by the appellant.
The said Company was also registered as a Small Scale Industry with the Directorate of Industries Commerce, the Government of Kerala.
The Collector in his order aforesaid further observed that the suppression ana wilful misstatement of facts and attempt made by the appellant to misdeclare material particulars for claiming clearance of the goods at a lower rate of duty and the attempt to evade payment of the companyrect duty payable on the goods made the goods liable to companyfiscation under Clauses m and o of Section 111 of the Act, and the appellant was liable to penalty under Section 112 of the Act and since the goods were number available for companyfisction, the Collector imposed a penalty of Rs.
Under the said agreement the Company agreed to take over and the appellant agreed to hand over the business run by the appellant as a going companycern with the assets and liabilities described in Schedule A to the agreement and it was also agreed that the appellant shall transfer the import licences, permits, quotas, factory licences, lease hold rights, telephone companynections etc.
On July 14, 1979, the partners of the appellant passed a resolution whereby it was mutually agreed and resolved that the business herein to run under the name of the appellant be transferred with all its assess and liabilities together with import licences, permits, quotas, factory licences, lease hold rights, telephone companynections etc.,
A similar resolution was passed by the Board of Directors of the Company on July 16, 1979, whereby it was resolved to take over the business of the appellant as far as possible with all its assets and liabilities as a going companycern together with import licences, permits, quotas, factory licences, lease hold rights, telephone companynections etc.,
Thereafter two of the partners in the appellant, K.O. Thomas and Jacob Punnoose were formally associated as share holders of the Company on March 12, 1980, and the other two minor partners, Thomman Jacob and Dilip Jacob were formally associated as share holders of the Company on March 23, 1981.
38,587.52 paise payable to the appellant in terms of the agreement dated July 31, 1979 was satisfied by allotment of 400 Equity Shares of Rs.
In order to avail this companycessional rate of customs duty it was necessary to have the companytract registered with the appropriate Customs House in the manner prescribed by the Regulations made by the Central Board of Excise and Customs under Section 157 of the Act.
as a going companycern to the Company.
Since the financial resources of the appellant were number quite adequate to meet the financial companymitments required for importation of the machinery as well as for purchase of raw materials, the appellant companysulted Mr. T.K. Jacob and his wife Mrs. Sally Jacob, the parents of the two minor partners in the appellant, who had financial interests in the appellant and as a result of the said deliberations a private limited companypany M s. Jacsons Veneers Panels Private Limited hereinafter referred to as the Company was incorporated under the Companies Act, 1956 on June 6, 1979.
84.66 of the Customs Tariff by making a misstatement in the application form dated November 21, 1979, for registration under the Project Import Registration of Contracts Regulations, 1965, that the machinery that had been imported was for substantial expansion of the existing industrial unit of the appellant and by suppressing the fact that under Agreement dated July 31, 1979, the appellant had agreed to transfer the said machinery to the Company.
After the execution of the said agreement a joint application dated August 31, 1979 was submitted by the appellant as well as the Company before the Deputy Chief Controller of Import Exports, Ernakulam for approval for transfer of business of the appellant to the Company and for transfer of import licence dated February 14, 1979, issued in favour of the appellant.
Thereafter the appellant, by letter dated February 4, 1980, informed the Deputy Chief Controller of Imports Exports, Cochin, that the machinery imported by it was being transferred to the Company and that the said transfer is in pursuance of the provisions companytained in paragraphs 351 to 354 of the Hand Book of Import Export Procedures 1979 80.
2,90,436.93 as customs duty.
Action has been taken against the appellant under the provisions of the Act for obtaining clearance of the goods by paying customs duty on a companycessional rate under Heading 84.66 of the Customs Tariff by suppression and wilful misstatement of facts.
Decorative Veneers per annum.
Here the relevant date was December 7, 1979, the date on which the duty was paid and the enhanced period of five years prescribed under the proviso to Sub section 1 of Section 28 was invoked by the customs authorities to issue the show cause numberice dated June 4, 1982, to the appellant.
On the other hand, the endorsement on the import licence submitted with the Bill of Entry which companytained a declaration by a partner of the appellant and the statements companytained in the application form for Registration dated November 21, 1979, indicated that the appellant would be using the imported machinery for subtantial expansion of its existing unit and on that basis the appellant was assessed for duty at a companycessional rate under Heading No.
38,587.52 paise.
was raised by the Assistant Collector of Customs, Special Investigation Branch, Cochin, by his letter dated July 27, 1983.
In the said show cause numberice it was also stated that the suppression and wilful misstatement of facts and the attempt made by the appellant to claim clearance of the goods in question at the companycessional rate applicable to project imports when the goods were number actually meant for the said purpose make the goods liable to companyfiscation under Clause m o of Section 111 of the Act and the appellant was liable to penalty under Section 112 of the Act.
50,000/ on the appellant.
The firm ws reconstituted on January 1, 1974, and two minors, Thomas Jacob and Philip Jacob, were admitted to the benefits of the partnership.
100/ each of the Company to the partners of the appellant on October 5, 1985.
On the basis of the aforesaid declaration in the Bill of Entry as well as the statement companytained in the Application for Registration under Project Import Registration of Contracts Regulations, 1965 submitted by the appellant that goods had been imported for the purpose of substantial expansion of an existing unit, the customs duty payable on the goods was assessed at a companycessional rate under Heading No.
The Collector, therefore ordered that the goods in question shall be re assessed to duty on imports under the appropriate heading of the Customs Tariff without giving the benefit of assessment under Heading 84.66 and to companylect the short levy from the appellant.
per annum and that the capacity after expansion would be 10,98,000 sq.mtr.
These resolutions were followed by an agreement dated July 31, 1979 executed by Mrs. Sally Jacob, Managing Director of the Company and Jacob Punnoose and K.O.Thomas, partners of the appellant.
When the goods arrived at the port in India the appellant filed the Bill of Entry on November 12, 1979, with the customs authorities which companytained a declaration signed by a partner of the appellant.
The appellant also submitted an application dated November 21, 1979, for registration under Project Import Registration of Contracts Regulations 1965, wherein it was stated that the goods to be imported are for the substantial expansions of an existing plant and that the existing installed capacity was 25,000 sq.
decorative Veneers per annum.
In July 1978, the appellant decided to diversify its business by manufacturing sophisticated decorative Veneers of thinner varieties and they decided to import a Horizontal Veneers Slicer and spares from Japan.
The said application was based on the agreement dated July 31, 1979.
The appellant submitted its replies dated July 7, 1982, and July 12, 1982, to the said show cause numberices.
By his letter dated November 26, 1979, the Deputy Chief Controller of Import Exports informed the appellant that since the shipment of the capital goods companyered by the import licence dated December 14, 1979, had already been effected the question of transfer of the licence does number arise.
In pursuance of the said order of the Collector of Customs, the customs duty payable on the goods imported was re assessed at Rs.
It was registered as a Small Scale Industrial Unit with the Department of Industries Commerce of the Government of Kerala, and was manufacturing wooden furniture and flush doOrs.
M s. Jacsons Thevara, the appellant herein, is a partnership firm.
and for this purpose to enter into an agreement with the appellant.
C. Agrawal, J. This appeal has been filed under Section 130E b of the Customs Act, 1962 hereinafter referred to as the Act against the order dated July 29, 1986 passed by the Customs, Excise Gold Control Appellate Tribunal hereinafter referred to as the Appellate Tribunal whereby the Appellate Tribunal dismissed the appeal of the appellant against the order dated February 24, 1983 passed by the Collector of Customs Central Excise, Cochin hereinafter referred to as the Collector .
