TMI Blog2016 (3) TMI 701X X X X Extracts X X X X X X X X Extracts X X X X ..... le to payment of duty on the unaccounted platinum. Imposition of penalty - Invokation of Section 114A of the Customs Act, 1962 - Held that:- Section 114A can be invoked where the duty has not been levied by reason of collusion or any wilful mis-statement or suppression of facts but here there is a bland allegation, there is no evidence of any wilful mis-statement or suppression. The notice alleges that despite the knowledge that there were shortages the respondents did not inform the revenue. But the respondents have argued that the shortages were to be calculated at the end of financial year and would have been reported. It is nobody’s case that the respondents were required to report it on daily or weekly basis. Therefore, in the absence of any evidence of any wilful mis-statement or suppression no penalty is imposable. Confiscation of goods - In lieu of redemption fine - Held that:- as per Hon'ble Supreme Court decision in a case, if the goods are released in custody of a person under a bond then the same can be confiscated even if the same are not physically available. But here, there was no bond for the use of goods in a particular manner. Therefore, the goods can not be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d under the policy and it was held that the respondents were fully aware of the shortages. It was held that it was a fit case for invoking proviso to Section 28 of the Customs Act, 1962 and the respondents were held liable to penalty under Section 114A. It was also held that since the respondents were aware of the excess manufacturing loss, the permissible limit and they failed to inform the Revenue resulting in clear violation of the condition 3 of the Notification No.137/2000-Cus. As a result, the platinum found short was held to be liable to confiscation under Section 111 (o) and 111(d) of the Customs Act, 1962. However no confiscation was ordered as goods were not available. It was also held that the duty of ₹ 9,70,040/- was payable by the respondent under Section 28 of the Customs Act. The order however does not confirm the penalties sought to be imposed on the two Directors on the ground that though they had prior knowledge of shortages and they did not report to Customs, there was no evidence to show that they have done so for their personal benefit and that non-reporting and non-maintenance of report not done at their behest. However, penalty on the respondent was uph ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h they could have come to know only at the end of year during the physical stock taking and it is incorrect to say that they have not maintained the records properly or have violated the condition of Notification No.137/2000-Cus. He argued that even if it is presumed that there was a shortage and the said shortage had not been utilised in the manner prescribed under Notification No.137/2000-Cus. They had immediately paid duty on the alleged shortages and since they had paid the said duty, the question of imposing penalty does not arrive. It was argued that there was a general finding that the respondent had violated the provisions of Section 9A of the EXIM polity. However, the exact violation has not been specified in the impugned order. It was argued that physical stocktaking was to be conducted at the end of the financial year, but the customs authorities visited their premises on 18th 19th March, 2002. It was argued that the respondent would have intimated the said shortage of platinum to the Customs authorities at the end of the financial year, i.e. on 31/03/2002. It was argued that the respondents were not aware of the exact shortages of platinum as they were expecting to re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mit quarterly/monthly statements to the Assistant Commissioner of Customs or to the Deputy Commissioner of Customs in the prescribed Appendix 16 of the Handbook of procedure Vol.I. It can be seen that total responsibility has been placed on the importer to use the goods in proper manner and to maintain records. In the instant case the records did not match the actual stocks. While on one hand excess loss has been sought to be explained on account of using Gold jewelry machines for making platinum jewelry, on the other hand it is claimed that the shortage may have been in the dust which was to be processed before end of financial year. It can be seen from the above that the benefit of notification is available only subject to following condition imposed in the EXIM policy. It is common ground between the parties that the EXIM policy permits process loss of only 9% in case of platinum jewellery. Therefore, terms of policy even violated in the instant case in so far as they have consumed platinum much in excess of the prescribed process loss prescribed under the policy. To that extent they have not fulfilled the conditions of the notification and have failed to account for the platinu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bond then the same can be confiscated even if the same are not physically available. The respondent relied upon the decision of the Tribunal in the case of SS Watch Industries Vs. CC (I) New Delhi - 2011 (274) ELT 369 (Tri-Del) to assert that when the goods are not physically available no redemption fine can be imposed. In the said decision, the Tribunal has observed as under: 3.3 However, as regards the redemption fine imposed under Section 125 of the Act in respect of the goods held to be liable for confiscation but which are not available for confiscation, provisions of Section 125 are attracted only in the cases when either the goods are physically available for confiscation or the goods had been released provisionally against the Bond and as per the terms of the conditions of the Bond, the person from whose possession/control the goods had been seized, is bound to produce the goods whenever called upon to do so. We are supported in this view from the judgment of Honble Punjab Haryana High Court in case of Commissioner of Customs, Amritsar v. M/s. Raja Impex (P) Ltd. reported in [2008-TIOL-280-HC-P H-CUS = 2008 (229) E.L.T. 185 (P H)] wherein the Honble High Court he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the case of Weston Components Limited that when the goods are released provisionally on execution of bond, confiscation can be affected even if the goods are not available. The natural conclusion is that the goods should have been released on bond which would mean that the goods have been taken possession of by way of seizure and subsequently released on execution of bond. Admittedly that is not the situation in this case also. In this case, respondents themselves have diverted the goods and after diversion, proceedings have been initiated. There is no seizure of the diverted goods and release of the same provisionally on execution of bond. Therefore, the issue is covered by the decision of the Hon ble Supreme Court and in the absence of release on the basis of execution of a bond, goods could not have been confiscated. The decision of the Larger Bench of the Tribunal relied upon by the learned Commissioner is also applicable since in this case also there is no bond with a security is available. The B-17 Bond is a general purpose bond undertaking to fulfil the conditions of notification and other requirements and does not help the Revenue to confiscate the goods not available and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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