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2019 (11) TMI 776 - CESTAT AHMEDABADExemption under Rule 26 of the SEZ Rules, 2007 - import of New Garments in the name of "old and used clothing rags" - goods accompanied by Pre-shipment Certificate as per Public Notice no. 12 (RE-2001)/1997-2002 dated 03/05/2001 or not - it is alleged that the unused T-shirts were being sought to be cleared as old and used clothing rags - Confiscation - penalties - HELD THAT:- It is seen that the Bill of Entry describes the goods as old and used clothing rags. In the instant case, the new clothes cannot be called rags and, therefore, there is a mis-declaration to this extent. Nonetheless, the said goods are covered by the letter of permission granted by the Development Commissioner and the appellants are entitled to take the same to the SEZ without payment of duty. The impugned order comes to the conclusion that the T-shirts imported by them do not confirm to the letter of permission. We find that contrary to the facts, the letter of permission is specifically issued referring to the project report. Letter of permission also permits them to manufacture reconditioned clothing. The project report clearly states that some of the reported garments that new and could be out of fashion in terms of time in these circumstances the conclusion of the Commissioner in the impugned order that the said T-shirts are not by letter of permission is mis-placed. Thus, the appellants are entitled to clear the goods to SEZ in terms of letter of permission and Rue 27 of the SEZ Rules. Thus, the charge under section 111(m) of the Customs Act, 1962 cannot be sustained in the instant case as the payments. As the appellants were clearly entitles to clear the said goods at SEZ at nil rate of duty. Charge under section 111(d) - HELD THAT:- Revenue has relied on Public Notice no. 12 (RE-2001)/1997-2002 dated 03/05/2001. The appellants have pointed out that the said circular permits Revenue to test goods at the time of import for pre shipment certificate. In these circumstances, confiscation can only be ordered if the goods do not confirm. In this case no testing was done by Revenue and, therefore, confiscation under section 111(d) cannot be justified. There is nothing in support for the charges made for invoking section 111(m) and section 111(d). Consequently, all the charges in the Show Cause Notice including imposition of Redemption fine and penalties fail - appeal allowed - decided in favor of appellant.
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