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2014 (5) TMI 240 - CESTAT AHMEDABADLeviability of penalties – Liability of exported “Castor oil’ to confiscation - Whether penalties can be imposed upon assessees u/s 113 (d) of the Customs Act 1962 – SEZ Schemes – Necessity of Development Comm. permission - Procurement and exportation directly from Domestic Tariff Area (DTA) units without following procedure - Section 11 (1), FTDR Act 1992 r/w para 18 (c) of Appendix 14 II of EXIM Policy 2002–07 and CBEC Circular No. 26/2003–cus dated 1.4.2003 - Sec. 2 (33), Sec 113(d) , 114 of Customs Act 1962 - Held that:- Procuring the goods by outsourcing from DTA units is not a routine procedure and is required to be allowed by the appropriate authority in genuine cases - Such outsourcing was to be used for fulfilling the export obligation of the appellants and has to be a category of Castor Oil being manufactured on sub-contracting from a DTA unit - An approval given by the Development Commissioner to outsource a material by trading does not mean that permissions required by other controlling departments was not required as the fulfillment of export obligation is also supervised by Customs - Taking of permission required to be taken under the Customs Act and the procedure prescribed thereunder, will amount to imposition of a prohibition for the purpose of Sec. 2 (33) of the Customs Act 1962. Relying upon M/s Eurasian Equipments & Chemicals vs. Commissioner of Customs and Other [1979 (7) TMI 101 - HIGH COURT AT CALCUTTA (FULL BENCH)] - In that case the issue was whether or not goods exported in violation or prohibition/restriction imposed u/s 12 (1) of the Foreign Exchange Regulation Act 1947will be deemed to be violation leading to penalty, w.r.t. goods already exported, u/s 114 - In that case as it was argued by the appellants that penalties u/s 114 can only be imposed w.r.t. ‘export goods’ which are not yet exported - The above case law was not brought to the knowledge of the Chennai Bench while deciding the case of K Kamla Bai vs. Commissioner of Customs and Central Excise, Trichy [2004 (12) TMI 238 - CESTAT, CHENNAI] which is thus distinguishable - In view of the law laid down by Calcutta High Court, confiscation of goods under Sec 113 (d) is an independent act from the penalties imposable u/s 114 (i) - Penalty u/s 114 (i) is attracted, on an act committed by the exporter, w.r.t. goods liable to confiscation, as soon as the goods are brought into a customs area for export in violation of the prohibitions/restrictions - An offence is thus committed by assessee and can not be wiped away by the fact that attempts of the appellants were successful - Therefore, penalties u/s 114 (i) have been rightly imposed – Decided against assesse.
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