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2020 (7) TMI 146 - CESTAT BANGALORE100% EOU - shortage of imported materials and non-movable items - Import of silk yarn and grey silk fabrics without payment of duty availing relevant Notifications 53/2007 & 52/2003 - HELD THAT:- The officers of DRI have found in addition to the shortages detected by the auditors, shortages in respect of goods claimed to have been re-imported by the appellants in consequence to the rejection of the same by the foreign buyer. The appellants have argued that as the warehousing period is not over, the demand is premature. Whereas, we find that Learned Commissioner has confirmed the demand in terms of the Notification No. 53/97 dated 03.06.1997 and 52/03 dated 31.03.2003 as the goods were neither utilized within the prescribed period nor any extension was sought. It is found that among other conditions, Notification No. 52/2003 requires the appellants “to maintain proper account of the receipt, storage and utilization of the goods.” The investigation conducted by the Revenue shows that the so-called re-imported goods were not found in the factory premises and no proper accounts of the same has also been done. The appellants have taken the plea that import, export, re-processing and re-export is a continuous exercise and that the re-imported goods were in the work in progress. This argument is not acceptable. It is not the case of the appellants they have maintained records showing the receipt, utilization and disposal of re-imported goods. Under the circumstances, it is found that the appellants have violated the conditions of the Notification and in terms of the Bond they have submitted at the time of import, they are liable to pay duty along with applicable interest. Penalty u/s 114A of the Customs Act, 1962 - HELD THAT:- There is merit in the argument of the appellants to the extent that the Revenue is free to demand and collect duty along with interest, in terms of the Bonds submitted by the appellants at the time of import in terms of Notification No. 52/03. The Bond submitted in terms of the Notification binds the appellants to pay back the duty and interest in the event of any violation. The said Notification does not provide for imposition of any interest and therefore, we set aside the penalty imposed. Also, the appellant’s submission vis-à-vis confiscation is also acceptable in terms of the Notification - penalty under Section 114A and other penal provisions cannot be invoked when the goods were permitted to be cleared by the officers. However, the Revenue will be free to recover duty along with interest in terms of the Notification - Commissioner has not imposed any fine in lieu of confiscation. Appeal allowed in part.
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