9911796707
TMI Blog2010 (12) TMI 1151X X X X Extracts X X X X X X X X Extracts X X X X ..... years from the date of the import by utilising the imported capital goods for such production/manufacture, (2) For availing of concession duty at 25 per cent. the importer has to execute a bond with a bank guarantee for Rs. 63 lakhs DGFT for the duty foregone, (3) The importer has to give an undertaking bond to the Customs Department by agreeing to pay" the differential duties with interest in the event of failure to fulfil the export obligations. The first respondent imported machinery in November, 1990 and started production March, 1994 and did not fulfil the export obligations within the stipulated period. 3. As the first respondent did not fulfil the export obligations and exported only 1.5 per cent. of the goods, the machineries were detained. A show-cause notice was issued by the DRI and the case was adjudicated by the Commissioner, by an order dated September 26, 2000, who, (1) denied the benefits of Customs Notification No. 169/1990, dated April 30, 1990 and confirmed the demand duty of Rs. 62,79,249, (2) confiscated the goods under section 111(o) of the Customs Act, 1962 with an option to redeem the goods on payment of redemption fine of Rs. 6,30,000, (3) demanded interes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... liable for confiscation and liable for penal action and the first respondent is liable to pay differential duty at Rs. 62,79,249. 7. He submitted that the order of setting aside confiscation of goods, imposition of redemption fine, penalty' and interest is against the law. He submitted that as per section 125(2) of the Act where any fine in lieu of confiscation of goods is imposed under section 125(1), the owner of such goods in addition is liable to pay duty and charges in respect of the goods. Section 125(2) of the Act takes in its folds charging of interest. The Centre by Notification No. 16/2000, dated March 1, 2000 fixed the interest at 24 per cent. per annum and the importer is liable to pay interest as per the rate fixed under section 28AB of the Act. 8. He challenged the finding of the Customs, Excise and Service Tax Appellate Tribunal that there was no mens rea for imposing penalty and for confiscation. He submitted that when the importer failed to comply with the export obligations, it is deemed that there is default on the part of the exporter. 9. On the other hand Mr. S. Murugappan, the learned counsel appearing for the first respondent, supported the order of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcumstances beyond their control they could not fulfil the export obligations in spite of their best efforts. Such factual finding was arrived at after noting that the importer/first respondent did not make any deliberate attempt to avail of benefits of the notification. The Tribunal also noted that the machinery was installed at the factory and production of goods was also started in March, 1994 and that they could only meet the export obligation to the extent of 1.5 per cent. only and that the Department did not allege the first respondent-company made deliberate attempt to avail of the benefits and concluded that there was no material to doubt about the first respondent's bona fides. Therefore, the Tribunal based on the aforesaid facts held that there was no mens rea and further held that the confiscation of goods and imposition of penalty is not sustainable. Hence, the finding of fact given by the Tribunal cannot be interfered with and therefore the first question of law is answered against the appellant. 11. The second and third questions of law are as follows:- "Whether the Tribunal is right in holding that interest on duty foregone under Notification No. 169/1990 canno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... integral part of proceedings relating to confiscation and consequential orders thereon, on the ground as in this case that the importer had violated the conditions of notification subject to which exemption of goods was granted, without attracting the provisions of section 28(1) of the Customs Act. A reference may beneficially be made to a decision of this court reported in Mohan Meaking Ltd. v. CCE [2000] 115 ELT 3 (SC); [2000] 1 SCC 462 wherein it has been observed in paragraph 6 '... Therefore, there is a mandatory requirement on the adjudicating officer before permitting the redemption of goods, firstly, to assess the market value of the goods and then to levy any duty or charge payable on such goods apart from the redemption fine that he intends to levy under sub-section (1) of that section.' In this view of the matter the objection raised by the centre that section 28 of the Customs Act would be attracted is not sustainable." 12. The notification only gives exemption whereas section 28(1) and 28AB deal with duty not levied, short-levied or erroneously refunded. Therefore the above sections would not applicable to the case in land. Hence the reliance of the learned c ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
