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2019 (5) TMI 828 - AT - CustomsImposition of penalty u/s 112(b) of Customs Act, 1962 - violation of import conditions - alleged diversion of duty free imported raw material into domestic area - HELD THAT:- We find that the appellant have received raw material from a 100% EOU firms namely M/s Royal Industries Ltd. under proper job work challan and entire quantity has been taken on the records by the appellant in his statutory books of accounts. It is also a matter of record and an admitted fact that after the conversion of Acrylic Fibre into yarn, a part of the manufactured quantity has been returned back to the raw material supplier namely, M/s Royal Industries Ltd. and balance quantity which was also got converted into yarn, as per the assertion of the appellant, was not lifted by the supplier and therefore, the appellant have cleared the same after taking the same in the statutory record namely RG-1 Register and on payment of appropriate Central excise duty. For invoking the provisions of Section 112(a) or 112(b) of the Customs Act, 1962 the subject goods need to be made ‘liable of confiscation’ - so far as the appellant is concerned the goods were duly covered by prescribed job work documents and the same were also taken on record in the books of the accounts of the appellant, therefore, the quantities which have been received by the appellant were not liable for confiscation as the same were covered by legitimate documentation. There was no violation of any provisions of Customs Act with regard to the raw materials received by them from the 100% EOU firm and thereby legally it cannot be alleged that the raw material namely acrylic fibre received by him was liable for confiscation - Since we find that the goods received by the appellant were not liable for confiscation u/s 111 of the Customs Act, therefore, the appellant is not liable for the penalty u/s 112(b) of the Customs Act, 1962. Penalty cannot be sustained - appeal allowed - decided in favor of appellant.
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