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M/s Charisma Jewellery Pvt Ltd., Sheelu Mathai Versus Commissioner of Customs, Airport, Mumbai

2016 (8) TMI 178 - CESTAT MUMBAI

Seizure of gold jewellery - allegation smuggling from from SEEPZ SEZ area to Domestic tariff area (DTA) - proceedings were commenced and concluded without issue of a show-cause notice as prescribed in section 124 of Customs Act, 1962 - Held that:- Even if the goods are subject to duty, section 12 of Customs Act, 1962 is not applicable owing to the definition of import ; the charging section is section 26 of Special Economic Zones Act, 2005 which is outside the scope of invoking by the original a .....

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nigh impossible for the units to remove finished products or inputs without detection at the time of such annual review. And shortage or failure to account for inputs is visited by recovery of duty and other penal action in accordance with the Special Economic Zones Act, 2005. There are adequate safeguards in that Act without the need to indulge in misadventure under the Customs Act, 1962 that does not extend to special economic zones. There are also provisions for action in the event of illicit .....

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Mathew, Member ( Technical ) Shri N.D. George, Advocate for the appellants Shri Chatru Singh, Asstt. Commissioner (AR) for the respondent ORDER These appeals have been filed against Orders-in-Appeal No. MUM-CUSTM-PAX-104 & 105/15-16, dated 16th June 2015 of Commissioner of Customs (Appeals), Mumbai III who has upheld the order of Additional Commissioner of Customs, CSI Airport, Mumbai confiscating 11 pieces of diamond studded gold jewellery valued at ₹ 4,99,257/- under Section 111(j) .....

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EPZ-Special Economic Zone, Andheri. The said person has had a daily entry pass for M/s Charisma Jewellery a unit with SEEPZ SEZ and a permanent entry pass issued as employee of M/s Diaster Jewellery Pvt Ltd. He produced a sale invoice issued by a unit situated outside SEZ which is a group company of M/s Charisma Jewellery. Consequent upon valuation the goods were seized as being attempted to be smuggled into domestic tariff area from SEEPZ SEZ in exercise of powers under Customs Act, 1962 read w .....

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Pareek in their illegal attempt to remove the gods from SEEPZ. In view of the above I find that the goods i.e. 11 pieces of diamond studded gold jewellery valued at 4,98,257/- are liable for confiscation under section 111(j) and (o) of the Customs Act, 1962. I find that Shri Abhishek Pareek through his act of omissions and commissions have rendered the goods liable to confiscation, and hence he has rendered himself liable to penalty under section 112(a) of the Customs Act 1962. I also find that .....

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ial Economic Zones took into the SEEPZ Special Economic Zone, that evidence of ownership by M/s Starlet Jewel Pvt Ltd. had been presented to the adjudicating authority who chose to disregard the same, that documents related to manufacture by the special economic zone unit, M/s Charisma Jewellery Pvt Ltd. had been furnished as evidence that the seized goods had no connection with the unit in SEEPZ Special Economic Zone and that the Director cannot be held vicariously responsible for technical bre .....

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w cause notice that preceded the adjudication by the Additional Commissioner of Customs, CSI Airport, Mumbai. It would appear that these proceedings were commenced and concluded without issue of a show-cause notice as prescribed in section 124 of Customs Act, 1962 as a precursor to adjudication. It would appear that the adjudicating authority was coy about notifying the authority under which he proposed to take action. It is all the more interesting that these proceedings were taken up and compl .....

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unit. If the claims of the appellants are indeed true, and no efforts made to ascertain the truth thereof, proceedings under the Customs Act, 1962 are contrary to law; the seized goods would be a manufactured product and hence beyond the scope of application of customs laws and the raw material would have been licitly cleared on payment of duty. By neglecting to verify the claims supported by documentation, the lower authorities have failed to perform a fundamental task implicit in the adjudica .....

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wo jurisdictions, one of them must prevail and it is in that context that this Tribunal must first ascertain if the proceedings thus far have the sanctity of law backed them. 10. The appellant-company operates as a functional unit in a Special Economic Zone; its approval, imports and procurement, utilization thereof and removal for export or domestic consumption is also statutorily established. Likewise, the exemptions and charging of duty are also unambiguously part and parcel of the Special Ec .....

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51 specifying: 51(1) The provisions of this Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law other than this Act. With this, it is unambiguously clear that a proceeding under the Customs Act, 1962 in relation to a unit or developer in a Special Economic Zone will fail owing to lack of jurisdiction. More so, when section 53 states 53 (1) A Special Economic Zone shall .....

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the appellant-unit, section 53 would exclude the jurisdiction of the Customs Act, 1962. 11. The original authority has placed reliance on section 53 (2) of Special Economic Zones Act, 2005 to invoke jurisdiction. That provision deeming zones to be customs ports does not, ipso facto, confer jurisdiction upon officers of customs. Officers of customs are a creation of the Customs Act, 1962 and thus from that statute that jurisdiction is conferred. A different statute will also have to incorporate a .....

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ntermediate delivery through customs formations. The definition of specified officer exists only in the Special Economic Zones Rules, 2006 and is intended to provide the qualification of the official discharging the functions of that office. Under the Special Economic Zones Act, 2005 all officers appointed for implementation of the Act function under the Development Commissioner and the original authority, not being so, is not empowered to initiate proceedings under the Special Economic Zones Ac .....

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n of import under section 2(23) the Customs Act, 1962 is restricted to with its grammatical variations and cognate expressions, means bringing into India from a place outside India. Notwithstanding the deemed status of being outside the Customs territory, zones are very much within the territory of India and the brining out of goods from a zone fails to meet the definition of import under Customs Act, 1962 and consequently fails the test of invoking the provisions of section 111 and 112. Even if .....

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