TMI Blog2011 (3) TMI 1305X X X X Extracts X X X X X X X X Extracts X X X X ..... removal by the appellant company and involvement of the appellant director in such clandestine removal, their failure to account for duty free gold is clearly established - the appellants dealt with 15 Kgs. of gold which are liable for confiscation, in view of non-fulfilment of export obligation - Considering the entire facts & including the facts that appellant company was a job worker and that the Commissioner has upheld the demand of duty against M/s. MMTC, deem it appropriate to reduce the penalty imposed on the appellant company from Rs. 25 lakhs to Rs. 5 lakh and penalty imposed on the appellant director from Rs. 25 lakh to Rs. 3 lakh.Decided against the assessee - C/410-411/2006 - C/122-123/2011(PB), - Dated:- 15-3-2011 - S/Shri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s. MMTC before the learned Additional Chief Judicial Magistrate and by order dated 20-8-99, the appellant was discharged with the following findings :- From the above discussion I find that the above gold was not entrusted to the Accused but ownership of the gold had passed on to the Accused for practical purposes. Even the delay in the export of gold ornaments does not appear to be because of the Accused but the role of the officers of M/s. MMTC appears to be existent in creating this dispute. If M/s. MMTC levels the charge of breach of settlement and the Agreement against the Accused the case of compensation for that is already pending before the Arbitration. No prima facie case of misappropriation of the said gold dishonestly and with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sponsible person of the appellant company. He submits that the complaint filed by M/s. MMTC regarding alleged clandestine removal by the appellant company and the appellant director stands disposed of by discharging the appellants. He also submits that the income tax, on the presumption, that the missing gold was converted into ornaments and sold by the appellant company in the domestic market added the income upto Rs. 9,45,000/-. This addition was set aside by the Commissioner Income Tax (Appeals). The department of income tax filed appeal before ITAT and failed. 4.2 He further submits that only M/s. MMTC as the importer of gold was responsible for its accountal and for fulfilling export obligation. By the impugned order, the Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure ornaments and export the same either directly or through M/s. MMTC. It is a clear case of non-fulfilment of obligation by M/s. MMTC and which has been caused by the failure of the appellant company in not accounting for the gold purchased and taken on loan from M/s. MMTC. The appellants have deliberately failed to co-operate in the investigation and stock taking. The stock taking was done in the presence of independent witnesses and missing of gold has come to notice. The other proceedings before the Chief Judicial Magistrate or before the Commissioner of Income Tax or ITAT has no direct relevance to the obligation to fulfil the export obligation arising out of procurement of duty free gold. 6.1 We have carefully considered the submis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rchase or on loan with a clear understanding that they shall manufacture gold ornaments and export the ornaments directly in respect of gold purchased by them and through M/s. MMTC in respect of gold taken on loan basis. There is clear failure in this obligation at least in respect of 7 Kgs. of gold purchased by the appellant company. In respect of 8 Kg. of gold which was procured on loan basis also, the appellant company was required to account for and manufacture ornaments and return the same to M/s. MMTC. No such evidence has been produced in support of fulfilling the export obligation. 7.1 No doubt that there is no evidence of the appellant director personally removing the gold and taking gold or gold ornament from the strong room of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are clearly responsible for fulfilling the export obligation. While there is no direct evidence, substantiating the charge of clandestine removal by the appellant company and involvement of the appellant director in such clandestine removal, their failure to account for duty free gold is clearly established. Further, it has not been denied that the appellants dealt with 15 Kgs. of gold which are liable for confiscation, in view of non-fulfilment of export obligation. 9. In view of the above, the penalties are warranted on the appellant company and appellant director. 10. Considering the entire facts and circumstances of the case, including the facts that appellant company was a job worker and that the Commissioner has upheld the demand ..... X X X X Extracts X X X X X X X X Extracts X X X X
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