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2016 (9) TMI 522 - CESTAT MUMBAI

2016 (9) TMI 522 - CESTAT MUMBAI - TMI - Confiscation - gold - shortages found during stock-taking - goods not available for confiscation - fine in lieu of confiscation - recovery of customs duty - imposition of penalty - Section 111, 112A, 125 of the Customs Act, 1962 - Notification No.117/94-Cus dated 21/10/1994 - SEEPZ unit - Held that: - the decision of the Apex court in the case of Weston Components Ltd. v. CC, New Delhi [2000 (1) TMI 45 - SUPREME COURT OF INDIA] does not apply here. - .....

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n of the same does not arise since goods have already become someone else's property. - Appeal disposed off - decided against Revenue. - Appeal No. C/1094/04 - Order No. A/89388/16/CB - Dated:- 24-8-2016 - Mr.Ramesh Nair, Member (Judicial) And Mr. Raju, Member (Technical) Shri.K.M. Mondal, Special Counsel, for appellant None for respondent ORDER Per Raju 1. The appellant, M/s.Jewel Tech India Pvt. Ltd. is engaged in the manufacture of jewellery in Santacruz Electronics Export Processing Zone .....

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n of their unit carried out by the Customs, certain shortages of gold were detected. A total shortages of gold of 13122.17 grams of 995 purity was found during the stock taking and it was valued at ₹ 54,76,406/-. A show-cause notice was issued to the appellant seeking to recover Customs duty and to impose penalty under Section 112A of the Customs Act. The notice also sought to confiscate the gold found short in the factory premises. The matter was adjudicated and demand of Customs duty on .....

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the provisions of Section 125 of the Customs Act, 1962. Instead, he has only imposed penalty under Section 112 (a) of Customs Act, 1962. In terms of Notification No.117/94-Cus dated 21/10/1994 as amended, specified goods are allowed to be imported without payment of duty for the purpose specified in the said notification on the strength of a bond executed for the said purpose. In terms of the condition of the said Bond the duty free imported goods are only to be used for the specific purpose i. .....

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dated 04/01/2000 (2000 (115) ELT 278 (SC). 2. The learned Special Counsel for Revenue argued that the decision of Hon bleSupreme Court in the case of Weston Component Ltd. is squarely applicable to the instant case. He argued that even if the goods were not available, the same were still liable for confiscation and the Commissioner should have been imposed a redemption fine in lieu of confiscation. The learned Special Counsel relied on the decision of the Tribunal in the case of Bimal Kumar Meh .....

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in discharge of export obligation under DEEC Scheme, is not in dispute. Hence there can be no resistance to the Commissioner s orders holding the goods liable to confiscation. The goods were, no doubt, not physically available for confiscation as they had been cleared duty-free and diverted long back. However, it is not in dispute that the clearance of the goods at Customs was allowed against bond and bank guarantee. That being so, the non-availability of the goods would not stand in the way of .....

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Act. 17. In the Mumbai case, no fine was imposed by the learned Commissioner apparently on the ground that the goods were not available for confiscation. This part of the Commissioner s order was not challenged by the Revenue. In the Chennai case, on the other hand, the learned Commissioner imposed a redemption fine under Section 125 of the Act in lieu of confiscation of the goods, quite justifiably, on the facts of the case. This part of the Commissioner s order in the Chennai case is under ch .....

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under the appellant cleared the goods duty-free. It is seen that in this decision, the final outcome was that the redemption fine imposed by the Commissioner was vacated. Para 18 of the said decision reads as follows: 18. As we have already indicated, in the Mumbai case, no redemption fine was imposed by the Commissioner, but the Revenue is not aggrieved. The learned SDR has not been able to offer a satisfactory explanation, nor has he showed a copy of the bond executed by the appellant to enabl .....

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g observation of the Tribunal. It has been stated before us that no bond was required to be executed at the time of provisional release of the goods. But this fact does not reduce the gravity of the offence attached to the goods. The Commissioner has fixed a Redemption Fine of ₹ 15,000/-. Having regard to the value of the goods (Rs. 77,676/-), we are of the view that a fine of ₹ 10,000/- would be reasonable in this case. Accordingly, we reduce the quantum of fine to ₹ 10,000/-. .....

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s Ltd. Vs. CCE, Hyderabad-II 2016 (333) ELT 395 (Tri-LB) has observed as follows: 46. Learned Senior Counsel for the appellants contested confiscation of impugned goods and imposition of redemption fine on the same. He submitted that there was no seizure at all or ever, either of the phones or the CD-ROMS imported by the appellants. Appellants had not executed any bond for provisional release of any goods in terms of Section 110A of the Customs Act, 1962. He further submitted that the bond menti .....

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gainst a bond, undertaking to produce the goods when called for. In such situation, the Hon bleSupreme Court held that redemption fine can be imposed if the goods are already cleared. Since, such release of goods is on execution of bond such fine was justified. We find that the Hon blePunjab & Haryana High Court in CC, Amritsar v. Raja Impex (P) Ltd. reported in 2008 (229) E.L.T. 185 (P & H) held :- 12. It may also be noticed here that in the case of M/s. Weston Components Ltd. v. Commis .....

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show that the Apex Court has taken the view that redemption fine can be imposed even in the absence of the goods as the goods were released to the appellant on an application made by it and on the appellant executing a bond. Since the goods were released on a bond the position is as if the goods were available. The ratio of the above decision cannot be understood that in all cases the goods were permitted to be cleared initially and later proceedings were taken for under-valuation or other irreg .....

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he goods were cleared by the respondent-authorities without execution of any bond/undertaking by the assessee. Thus, in view of the fact and circumstances of the case, we find no error in the impugned orders. No substantial question of law arises for our determination in the present appeal and the same is hereby dismissed . 47. Further, learned Counsel pleaded that the fine is payable, if at all, only on redemption of goods. Here there is neither a seizure nor provisional release under bond and, .....

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Z was examined. Para 7 of the said order reads as follows: 7. Revenue argued that the platinum imported was on execution of bond under Notification No. 137/2000 which require them inter alia to dispose of the said 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 wit .....

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hat the goods were released to the appellant on an application made by it and on the appellant executing a bond. Under these circumstances if subsequently it is found that the import was not valid or that there was 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 .....

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r : 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 bou .....

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e imposed, that Hon bleSupreme Court s judgment in case of Weston Electronic Components v. Commissioner of Customs, New Delhi reported in 2000 (115) E.L.T. 278 (S.C.) is applicable only in those cases where the goods had 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. Exp .....

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t in similar circumstances the Tribunal has observed as follows (i) Kay Bee Tax Spin Ltd. - 2014 (305) E.L.T. 132 The Revenue is in appeal only for reason that the Adjudicating Authority has not ordered for confiscation of 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 o .....

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e has foregone the Customs duty. (ii) Gunjan Exports - 2013 (295) E.L.T. 733 5. I have considered the submissions and I find myself unable to appreciate the submissions. The Hon bleSupreme Court had clearly held in 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 .....

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