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2016 (5) TMI 599

Head Note / Extract:
Settlement of a case - Demand of Custom duty and imposition of penalty - Section 112, 114A & 114AA of Custom Act, 1962 - Evasion of Special Additional Duty - Goods imported through Free Trade Warehousing Zone without payment of SAD by claiming exemption under Notification No. 45/2005-Customs, dated 16-5-2005 and were used in their factory for manufacturing of PVC flooring - Clearances made during the period from 12-3-2013 to 30-7-2013 - Revenue objected that the application is inadmissible because of the bar provided in Section 127L.

Held that:- the words and phrases used in the Section 127L are “shall not be entitled to apply”. The bar is on applying subsequent to order of settlement imposing the penalty. The applicant’s case is not clearly hit by this bar as in their case the present application has been filed before the order imposing penalty was passed. Thus, the Bench’s earlier order allowing the application to be proceeded with is unaffected.

Whether the benefit of exemption from SAD under this notification would be available when a DTA unit imports goods and routes it through SEZ/FTWZ for self-consumption i.e. in the nature of stock transfer from SEZ/FTWZ” - Held that:- the Board through circular 44/2013, dated 30-12-2013 has clarified that the benefit of the notification is not available to the goods which are for self-consumption and consequently SAD is attracted. In the instant case, the goods were for self-consumption and condition of the notification was not satisfied. As such the provisions of Section 111(o) get attracted rendering the liable to confiscation and the applicant/co-applicant liable to penalty under Section 112. The goods are not available for confiscation but the applicant/co-applicant are liable to penalty under Section 112. As there was no misstatement, fraud, etc., neither Section 114A nor Section 114AA is attracted.

Quantum of penalty under Section 112 - Held that:- the opening paragraph of the Board’s circular confirms the claim of the applicant that there was confusion about the applicability of SAD. This fact will have a bearing on the quantum of penalty. The immunities to the applicant and the co-applicant are granted under Section 127H(1) of the Act. Their attention is also invited to the provisions of sub-section (2) and (3) of Section 127H ibid. This order shall be void and immunities withdrawn if the Bench, at any time finds that the applicant had concealed any particular material from the Commission or had given false evidence or had obtained this order by fraud or misrepresentation of facts.


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