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2019 (7) TMI 399 - AT - CustomsDEEC Scheme - violation of post import condition - import in excess of requirement against SION norms - diversion of goods to sister concerns in the name of Job-Work - imports of Hexachloroethane under DEEC Licenses - Department alleges that the Appellants have misrepresented the facts of input out ratio to the authorities of DGFT; thus they have imported HCE in excess of their requirements and also they have violated the condition of Customs Notification 30/97 dated 01.04.1997 - time limitation - penalty. HELD THAT:- Learned Adjudicating Authority has given a clear finding that there was no records maintained at the factory premises of M/s. SCI for receipt of imported PCE. From the RG 23A Part I maintained by the importer, it is seen that no entry of PCE as raw material has been made through 3 consignment of PCE purchased locally were entered. Therefore, the claim of the Appellants that they have merely sent the goods for Job Work to M/s. SCF do not stand scrutiny - the investigation has successfully established that goods cleared to M/s. SCF by the Appellants have not returned back. The Appellants have taken the plea that M/s. SCF have themselves imported / locally procured PCE and sold to others and therefore the allegation that the sale of PCE, imported by the Appellants, by M/s. SCF is not proved. The investigation has successfully demonstrated that the goods even if they were supposed to have been sent to M/s. SCF on job work basis have never back to the Appellants for further use and export in their factory. In the result one has to hold that such goods have been diverted in to the local market in contravention of the Exim Policy and the Customs Notification. Violation of conditions of the notification or not? - HELD THAT:- The conditions of Notification have to be read very strictly. It is found that in spite of the claim of fulfilling the export obligation and discharge of bond by DGFT and Customs authorities, the liability of the appellants to pay duty in the event of violation of Customs Notification lies with him as held by the commissioner and the case law cited by him supports this contention - Condition No (vii) to the Notification No 30/97 dated 01-04-1997 stipulates that Exempt materials shall not be disposed of or utilized in any manner except for utilization in discharge of export obligation or for replenishment of such materials and the materials so replenished shall not be sold or transferred to any other person. The condition of the Notification is violated. In view of the clear wordings of the notification, no liberal reading in to the conditions on the basis of substantial compliance is required - Having violated the conditions of the notification the importer has rendered himself liable to pay applicable duty in terms of the Notification. Time Limitation - HELD THAT:- It is not the case of the appellants that the fact of diversion, of goods imported duty free under Advance License, was in the knowledge of the department. Revenue was not made aware of the acts of omission and commission of the Appellants - Learned Commissioner has correctly found that the SCN is not hit by limitation and that duty has been correctly demanded and penalty under Section 114A was rightly imposed. Penalty - HELD THAT:- The goods were imported by the appellants and the appellants are liable to pay duty in case of any violation - partner of the appellants is also the authorised signatory of M/s SCF. Equal Penalty under Section 114A has been imposed on the appellants and we have upheld the same - the penalty imposed on M/s SCF appears to be higher side. The penalty on M/s SCF reduced to Rupees one Lakh only from Rs Six Lakhs. Interest on penalty under Section 114A - HELD THAT:- The interest payable on the duty demanded does not require to be taken into consideration for arriving at the amount of penalty payable under Section 114A. Appeal allowed in part.
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