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2013 (10) TMI 1004 - CESTAT NEW DELHI100% EOU - violation of conditions - Suspension of license - Import of fabrics under duty free licence for 100% EOU - The appellant has imported duty free polyester fabric and disposed it off in the open market. Notice No. 1 exported Ready made garments procured from the open market without undertaking any manufacturing activity in the factory. - Duty demand - Liability u/s 112 of Customs Act - Held that:- The seized polyester dyed embossed fabrics has been found to be actually knitted fabrics classifiable under Chapter 60 of CTA as is evident from the test report and the said fabrics do not correspond to the material imported i.e. polyester fabrics 58/60 and 100% polyester dyed fabrics 58/60 of chapter 54 of Customs B=601007 dated 15.01.2002 filed by Noticee-1 under Section 46 of the said Act and claimed to have been sent to Noticee-2 by Noticee-1 under ARE-3 No.1&2, both dated 11.6.2002, therefore, the seized fabric held is held liable to confiscation under Section 113 (i) of the said Act. It is further held that the seized fabrics, are also liable to confiscation under Section 113 (d) of the said Act as the same were attempted to be exported through another EOU contrary to the provisions under said Act and the Notification No. 53/97-Customs dated 3.6.1997, as amended, I hold that the Customs duty of ₹ 24,37,818/- on the imported polyester fabrics measuring 52829.92 meters and valued at ₹ 22,45,759/- vide Bill of Entry No. 539120 dated 22.01.2002 and IMP-B-B-601007 dated 15.02.2002, so diverted in the local market, and not utilized for intended purpose is recoverable from Notiee-1 under proviso to Section 28(1) of the said Act read with Notification No. 53/97-Cus dated 3.6.1997, as amended Noticee-1 is also hold liable to penal action under Section 114 as well as under Section 112 of the Said Act. The license granted to noticee-1 under Section 58(1) of the said act is also held liable to be cancelled under Section 58(2) of the said Act for contravention of the provisions of the said Act. Commissioner (Appeals) has rightly held that Shri Karamveer Singh, Proprietor M/s Singh Overseas is liable for action under section 112 of Customs Act, 1962 for the contraventions of the provisions of Customs Act, 1962. Accordingly the demand of Customs duty of ₹ 24,37,818/- on polyester fabric imported duty free and diverted in open market and not utilized for intended purpose is upheld by us for no rebuttal to appellate findings. Interest on duty amount of ₹ 24,37,818 is also confirmed - Imposition of penalty of ₹ 25 lakhs on Shri Karamveer Singh, Proprietor does not appear to be unreasonable. Therefore the appellant does not deserve any leniency who has also committed fraud against Revenue by his ill design - Decided against assessee.
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