TMI Blog2008 (4) TMI 560X X X X Extracts X X X X X X X X Extracts X X X X ..... following amounts:- (i) M/s. Bank of Nova Scotia - Rs. 92,50,000/- as Customs Duty. (ii) M/s. Bank of Nova Scotia - Penalty of Rs. 10 Crores under Section 112(a) (iii) M/s. Rajesh Exports Limited - Penalty of Rs. 25 Crores 3. The first appellant M/s. Bank of Nova Scotia (BNS in short), Bangalore, is a Nominated Agency by the Directorate General of Foreign Trade for import of Gold Bars without payment of duty under the Scheme for Export against supply by Nominated Agencies. The second appellant M/s. Rajesh Exports Limited (REL in short) had procured duty free gold bars from the first appellant during March, 2004 and had exported gold medallions to M/s. Star Jewellers, Singapore for which no foreign exchange was realized. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 98-Customs, dated 20-4-1998. He further held that the second appellant, by virtue of non-realization of the export proceeds in respect of exports made to M/s. Star Jewellers, Singapore during March, 2004 had abetted in the commission of an act which renders the 925 Kgs. of gold bar liable to confiscation under Customs Act, 1962. Hence, REL were liable to penal action under Section 112(a) of the Customs Act. The above findings and the consequent orders of the Original Authority have been strongly challenged by the appellants by way of filing appeals. 4. S/Shri B.V. Kumar and Kiran S. Javali, the learned Advocates, appeared for the appellants (1) and (2) respectively. Shri P.R.V. Ramanan, the learned Special Counsel, appeared on behalf of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner of Customs undertaking, to export either by itself or through other exporters gold jewellery or articles having gold content equivalent to the imported gold within a period 120 days from the date of issue of gold to the Exporters. In the instant case, admittedly, the articles of gold viz. gold medallions manufactured out of 925 kgs. of gold issued by the appellants have been exported by M./s. REL to Star Jewellers and proof of export have been submitted. In such circumstances, there is above mentioned Notification. Hence, demand of duty in terms of the bond executed by the first appellant does not arise. (iv) As far as the Bank Certificate of Export and Realization is concerned, the same is required to be obtained by the second a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e provisions are applicable only to the exporter and not to the first appellant. (vii) The first appellant had not violated Section 71 of the Customs Act inasmuch as the impugned gold has not been taken out of the warehouse contrary to the provisions of the Act. The impugned gold was issued to the exporter vis. M/s. REL for being converted into articles of gold for export in accordance with paras 4.77 and 4.77A of EXIM policy and the RBI's letter dated 31-12-1998. (viii) No duty can be demanded under Section 72 inasmuch as none of the circumstances mentioned in clauses (a) to (d) of sub-clause (1) of the said Section 72 have occurred in the instant case. Reliance was placed on Tribunal s decision in the case of Interface Connectronics ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reign exchange upon the export of gold medallions. The term export obligation is to be construed according to the spirit and letter of paragraphs 4.62, 4.77 and 4.79 of Hand Book of Procedures. A harmonious reading of these provisions would show that export does not just end with physically moving the goods out of the country. The basic purpose of realization of due foreign exchange ought to have been complied with in order that the transaction can be regarded as exports, particularly when export incentive in the form of duty free inputs has been availed by REL. 7.1 Even though the export has been completed, the appellant (second appellant) has not complied with para 4.62 of the Hand Book of Procedures. The appellants had effected the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant. The second appellant converted the gold to gold medallions and exported the same to a party in Singapore. However, the export proceeds had not been realized by the second appellant. Hence, Revenue proceeded against both the appellants. In terms of the relevant Notification No. 57/2000, dated 8-5-2000, the export of jewellery manufactured from the gold procured from the Nominated Agencies on loan basis must be completed within 120 days of release of gold by the Nominated Agencies. In the present case, the Nominated agency is the first appellant who supplied gold to the second appellant. Only when the gold articles are not exported within the stipulated time of 120 days, the Nominated agency is liable to pay the customs duty. This ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
