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Shri Liladhar T Khusiliani And Shri Sanjay Ahuja Versus Commissioner of Customs-Kandla

Imposition of penalty - DTA clearances - Fraudulent availment of DEPB Credit - Held that:- There was a demand of duty of ₹ 201.50 crores and ₹ 1.05 crores confirmed against the said company alongwith interest and penalty of equal amount of duty. The appeal of the said Company was dismissed for non-compliance of the Stay Order. So, there is no need to go into the merits of the case on export of the goods as the appeals of the said Company was dismissed. The Adjudicating Authority obse .....

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ious importers to import the goods duty free and imposition of penalty under Section 112 is justified. It is noted that the said Company exported the goods in irregular manner and penalty under 114 is warranted. It is further noted that the said company cleared the goods from DTA of SEZ in violation of the Central Excise Rules and imposition of penalty under Rule 26 is justified. - However, penalty on 1 appellant is set aside - Decided partly in favour of Appellant. - Appeal No. : C/295, 316/200 .....

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ts of the case, in brief, are that M/s Trisuns chemical Industries Ltd (hereinafter referred to as the Company) a unit set up in Kandla Special Economic Zone, engaged in the manufacture of Castor Oil of different grades. They had another unit in Domestic Tariff Area (DTA) at Bhachau. A Show Cause Notice dtd 27.7.2004 was issued to the Company proposing demand of duty alongwith interest and to impose penalty on the said Company, amongst others, including the appellant herein. It has been alleged .....

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It has also been alleged that the said Company obtained DTA License against the exports made out of the Castor Oil received from the Kandla Special Economic Zone and transferred such license to different importers, who availed exemption of customs duty under Notification No 34/97-CUS dtd 7.4.1997 as amended. By the impugned order, the Adjudicating Authority confirmed the demand of duty alongwith interest and also imposed penalties on the said Company and the appellants herein amongst others. The .....

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Company filed the appeal against imposition of penalty of ₹ 6 lacs and ₹ 10 lacs under Section 112 and 114 of the Customs Act respectively. 4. Shri Anand Nainavati, Learned Advocate appearing on behalf of the Shri Liladhar submits that Shri Liladhar has no involvement and submits that it is apparent from the records that the allegations levelled against the said Company cannot be sustained as the goods were exported by the said Company. He further submits that Shri Liladhar has no in .....

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urther submitted that there is no import of goods and the imposition of penalty under Section 112 cannot be invoked. The goods have already been exported and penalty under Section 114 cannot be sustained. It is a case of the Revenue that the goods were cleared from DTA to SEZ and the goods were ultimately exported and therefore Rule 26 of the Central Excise Rules cannot be maintained. It is submitted that the confirmation of duty demand against the Company itself is bad in law and therefore ques .....

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or Oil and therefore question of imposing penalty under Rule 26 in respect of clearance made from SEZ does not arise. 5. Shri Paritosh Gupta, Learned Advocate appearing on behalf of Shri Sanjay Ahuja submits that the appellant joined in the said Company at the age of 23 years and acted at the instruction of the Director of the Company. He had no knowledge of the alleged irregularity. He drew the attention of the Bench to the relevant portion of the Show Cause Notice and Adjudication Order to est .....

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s, we find that the said Company is a public limited company. On a query from the Bench, the Learned Advocate submits that the said company was controlled by the appellant Shri Liladhar and other two family members, holding about 95% of the share and the remaining 5% are outsiders. We find that there was a demand of duty of ₹ 201.50 crores and ₹ 1.05 crores confirmed against the said company alongwith interest and penalty of equal amount of duty. The appeal of the said Company was di .....

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said Company) and Shri Deepak S Joshi, (Customs Clerk of the said Company) as well as facts, which were specifically brought on record. The appellant had not placed any evidence on record to refute the allegations made in the Show Cause Notice. Shri Liladhar is the master mind to export the goods to the third country and to show the shipment to be to Russia to get the payments in Indian Rupees/dollars. As per his direction, the shipping bills were used to be filed to showing the destination as .....

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ecessary. Hence, in our considered view the imposition of penalty on the appellant is justified. 7. The said Company obtained DEPB license fraudulently and facilitated the various importers to import the goods duty free and imposition of penalty under Section 112 is justified. It is noted that the said Company exported the goods in irregular manner and penalty under 114 is warranted. It is further noted that the said company cleared the goods from DTA of SEZ in violation of the Central Excise Ru .....

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