Subscription   Feedback   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Articles Highlights TMI Notes SMS News Newsletters Calendar Imp. Links Database Experts Contact us More....
Extracts
Home List
← Previous Next →

Commissioner of Customs, CSI Airport, Mumbai Versus S.B & T International Ltd.

2016 (3) TMI 701 - CESTAT MUMBAI

Demand of Customs duty - Platinum imported but found shortage - Explanation provided but not found acceptable by revenue in terms of condition No.3 of Notification No.137/2000-Cus dated 19/10/2000 - Held that:- the records did not match the actual stocks. On one hand excess loss has been sought to be explained on account of using Gold jewelry machines for making platinum jewelry, while on the other it is claimed that the shortage may have been in the dust whish was to be processed before end of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

account for the platinum and therefore, liable 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 shorta .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

se, 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 confiscated followed by the decision of Tribunal in the case of SS Watch Industries Vs. CC (I) New Delhi [2008 (11) TMI 420 - CESTAT, NEW DELHI]. - Decided partly against the revenue - Appeal No.C/568/04 & Appln.No.C/CO/478/04 - Final Order No. A/85 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

said stock with that recorded in their books of accounts certain variation was detected. The variation in the quantity in the gold and diamonds was satisfactorily explained by the respondent. However, they could not explain the shortage of 5,987.17 gms of platinum in the stock. The respondents tried to explain the shortage as manufacturing loss and possible thefts. This explanation was not found acceptable in terms of condition No.3 of Notification No.137/2000-Cus dated 19/10/2000, which require .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

said platinum was liable to confiscation under Section 110 (o) of Customs Act, 1962. It was also alleged that the respondent had violated the provisions of Chapter 9A of the (Export-Import) EXIM Policy as well as the Handbook of Procedures, 1997-2002 prescribed in para 9A.5 to the effect that the wastage/manufacturing loss of platinum in the manufacture of jewellery shall be within overall percentage prescribed in Appendix-41 of Handbook of Procedures. The Handbook of Procedures vide Serial No.1 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

hey 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

of the duty payable under Section 114A of the Customs Act, 1962. There was no order of confiscation or imposition of redemption fine in lieu of confiscation. Revenue is in appeal against the said order on the ground that the Commissioner ought to have confirmed penalty equal to the duty evaded and not merely 25% of the duty involved under Section 114A of the Customs Act. The commissioner ought to have imposed a redemption fine in lieu of confiscation. 2. It was argued by the learned AR that the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ine in lieu of confiscation under Section 125 of the Customs Act. It was argued that since the goods were released on the strength of a bond, a redemption fine is imposable even if the goods were physically not available for confiscation. Revenue relied on the decision of the Honble Supreme Court in the case of Weston Components - 2000 (115) ELT 278 (SC). 3. The learned Counsel for the respondent argued that no penalty can imposed. The respondent also filed a cross objection against the said ap .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

lry. It was also argued that a limit of 9% wastage does not cover intangible manufacturing loss. It was argued that they had maintained the records properly and they submitted that they were not aware of exact shortage, which 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 the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 recover some platinum from the dust and sweeping collected at the time of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e above, no fine can be imposed in lieu of confiscation. As regards the penalty under Section 114A, it was argued that neither any intention to evade duty on the part of the respondents nor there is any allegation in the show cause notice that the respondent had any intention to evade duty and therefore, imposition of penalty by the Commissioner under Section 114A of the Act is illegal and bad in law. It was argued that they had paid the duty immediately on shortages being pointed out by the Rev .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

evidence of any clandestine removal of platinum. In the initial stages, the respondent had hinted some thefts however there was no further investigation on that line. The shortages of platinum are either on account of process loss or pilferages. Notification No.137/2000-Cus allow the import of these goods subject to execution of bond in the form specified by the Assistant Commissioner or Deputy Commissioner binding himself among other things to dispose of the imported goods, the article produced .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ccount for the platinum and therefore they are liable to payment of duty on the unaccounted platinum. 6. Section 114A of the Customs Act, 1962 can be invoked only in cases where the duty has not been levied by reason of collusion or any wilful mis-statement or suppression of facts. In the instant case while 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 i .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d goods or service in terms of the notification and bond. The said bond also bound them to the condition that in case of failure to utilise the said goods for the said purpose within a period of five years to pay an amount equal to the duty leviable on the said unutilized goods along with interest @ 25% on the said duty from the duty of importation till payment of such duty. Revenue has relied on the decision of the Honble Supreme Court in the case of Weston Components Ltd., Vs. CC, New Delhi - .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

any other irregularity which would entitle the customs authorities to confiscate the said goods, then the mere fact that the goods were released on the bond being executed, would not take away the power of the customs authorities to levy redemption fine. 2 The appeal is dismissed. It is apparent from the decision of Hon ble Supreme Court that 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. The responden .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tracted 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. rep .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d been released against a bond executed by the person from whose possession/control the goods had been seized and that when the goods have been released against a bond, the position is as if the goods were available. Same view has been taken by the Tribunal in the case of G.M. Exports v. Commissioner of Customs, Bangalore reported in 2008 (226) E.L.T. 571 (Tri.-Bang.). In this case, the goods held to be liable for confiscation in paras 116(ii), (iii) & (iv) of the impugned order are neither .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the raw materials despite there being a bond executed by the assessee. We find that the main plank of the Revenue s appeal is that the commissioner has erred in refraining from formally confiscating and imposing redemption fine on of goods. In our view, the revenue appeal is on diversion of imports and inasmuch as when the goods are not there for confiscation, the question of confiscation cannot arise. Reliance placed by the revenue on the judgment of the Supreme Court in the case of Western Co .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 divers .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

what is new what is new
  ↓     bird's eye view     ↓  


|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version