Whether Magnesite Spinal Bricks be imported under DFRC and DFIA scheme?

PJ/Case Laws/2012-13/1492

Case:- SANGHI INDUSTIES LTD. VERSUS COMMISSIONER OF CUSTOM, KANDLA

Citation:- 2013 (289) E.L.T. 62 (Tri.- Ahmd.)

Brief Facts:-This stay petition is filed for waiver of pre-deposit of the amount of Rs. 1,51,62,779/- on M/s. Sanghi industries Ltd., interest thereof and equivalent amount of penalty and a penalty of Rs.5 lakhs on Shri Alok Sanghi, the Director of M/s. Sanghi Industries Ltd. on the ground that appellant has availed wrong duty of exemption on import of Magnisite Refactory Bricks.

Appellant Contentions:- Ld. counsel would take us through the entire order-in-original. He submits that the appellant imported Magnesite Spinal Bricks under DFIC and DFAI scheme. He would draw our attention to the standard input and output norms at Sl. No. 1050. He would draw our attention to the facts that the appellant were manufacturing cement for which they were allowed to import magnesite bricks for using them in the kiln. It is submission that they have imported item correctly and they have used the same in the factory premises, which is undisputed. It is undisputed that what they have imported is bricks which contains 15% of other oxide i.e. Aluminium oxide. He would emphasize that consumption of bricks on receipts of factory premises is not disputed nor there is any allegation as to contents of the said materials and eligibility to DFRC and DFAI benefits.

Respondent Contentions:- Ld. SDR on the other hand would submit that the appellant’s director and manager had themselves accepted to the shortage of refractory bricks. It is his submission that there is no clear declaration regarding the use of imported goods in the application form, appendix 23 to the DGFT authorities. He would also take us through the various specifications of laboratories and submit that Magnesite Refactoty Bricks and Magnesite Spinal Bricks are different. It is his submission that both would fall in different Customs Tariff Heading and the goods imported could not be imported under DFRC and DFIA benefit and the appellants should have discharged duty liability.

Reasoning of Judgment:-We have considered the submission from both the parties. We find that the issue lies in a narrow compass. The fact that the appellant had imported Magnesite Spinal Bricks is not disputed nor the fact that the said bricks have been used in the factory premises in the kilns. It is also seen that the standard input and output norms has specifically indicated the import of “Magnesite Refractory Bricks “ or “Magnesite Spinal Bricks”. At Sl.No.3 at A1050 of standard norms it is seen that the standard input and output norms has given only broad heading and the McGraw-Hill dictionary of scientific, technical terms, specifically gives the meaning of Spinal Bricks which is a type of bricks composed of magnesium oxide and 15% of other oxides. It is undisputed in this case that the goods which were imported by the appellant is of magnesium oxide and 15% of other oxide contents contains which is aluminium oxide. We find prima facie that the HSN notes also supports the case of the appellant, i.e. Magnesite Spinal Bricks would cover the Magnesite Refractory Bricks. At this juncture, we are of the considered view that the appellant has made out a prima facie case for the waiver of the pre-deposit of the amounts involved. Accordingly, applications for the waiver of pre-deposit of the amounts involved are allowed and recovery thereof stayed till the disposal of appeals.

Decision:- Stay granted.

Comment:-The conclusion that can be drawn from this case is that prima facie, Magnesite Spinal Bricks would cover Magnesite Refractory Bricks and would be eligible for DFRC and DFIA benefit.

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PJ/Case Laws/2012-13/1492

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