Feedback   New User   Login      
Tax Management India. Com TMI - Tax Management India. Com
Acts / Rules Notifications Circulars Tariff/ ITC HSN Forms Case Laws Manuals Short Notes Articles SMS News Highlights
        Home        
Extracts
Home List
← Previous Next →

Commissioner of Central Excise And Customs Versus Kay Bee Tax Spin Ltd.

2017 (1) TMI 1223 - GUJARAT HIGH COURT

100% EOU - Whether in the facts and circumstances of the case, the Tribunal has committed substantial error of law in holding that when the charge against the respondent, which is 100% EOU of diversion of imports and the goods are not available for confiscation, the question of confiscation of such goods and redemption u/s 125 of the Customs Act, 1962 does not arise? - Held that: - the respondent-Unit was permitted to deposit the goods in a bonded warehouse without making payment of the Customs .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ady diverted/permitted to be warehoused without payment of duty, on furnishing the bond and the undertaking and thereafter, the respondent-Unit clandestinely and illicitly diverted the goods to the open market, the goods which otherwise were liable to be confiscated, in lieu of confiscation, redemption fine was imposable. - The matter is remanded to the Adjudicating Authority for imposition of redemption fine in lieu of confiscation with respect to the goods which were illicitly diverted int .....

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 Tribunal ], the Revenue has preferred the present Appeal to considering the following substantial question of law : Whether in the facts and circumstances of the case, the Tribunal has committed substantial error of law in holding that when the charge against the respondent, which is 100% EOU of diversion of imports and the goods are not available for confiscation, the question of confiscation of such goods and redemption under Section 125 of the Customs Act, 1962 does not arise ? 2. The f .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

cheme under Section 58 of the Customs Act, 1962 by the Deputy Commissioner, Central Excise & Customs, Division V, Surat. That, it was found that the respondent-Unit diverted the goods illicitly into the open market and the raw-materials which were procured by forgoing the customs duty were not used for the purpose for which they were imported. Therefore, the Commissioner, Central Excise & Customs, Surat-II served a show cause notice upon the respondent, making the demand of Central Excis .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

terial, interest thereon and imposed the penalties under various sections of the Customs Act, 1962 and the Central Excise Act, 1944. The said dues were adjudged by the Adjudicating Authority on the ground that the respondent being a 100% EOU, had diverted the goods illicitly into the open market and the raw materials which were procured by forgoing the customs duty were not used for the purpose for which they were imported. The respondent accepted the order passed by the Adjudicating Authority. .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

or imposing the redemption fine in lieu of confiscation on the ground that the goods were not there for confiscation, and therefore, the question of confiscation cannot arise. The learned Tribunal observed and held that once the goods were not available for confiscation, there is no question of imposing redemption fine in lieu of confiscation. Feeling aggrieved and dissatisfied by the impugned judgment and order dated 11th February 2014 passed by the learned Tribunal in holding that the Adjudica .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ation, the question of confiscation of such goods and redemption under Section 125 of the Customs Act, 1962 does not arise ? 3. Shri Sudhir Mehta, learned advocate appearing on behalf of the appellant-Revenue has vehemently submitted that in the facts and circumstances of the case, the learned Tribunal has materially erred in holding that as the goods were not available for confiscation at the time of issuance of the show cause notice for adjudication, the redemption fine in lieu of confiscation .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ndent herein-importer on issuing the bond and necessary undertaking, as held by the Hon'ble Supreme Court in the case of Weston Components Limited v. Commissioner of Customs, New Delhi, 2000 [115] ELT 278 (SC), the redemption fine is imposable. 3.2 Shri Mehta, learned advocate appearing on behalf of the Department has also relied upon a decision of Karnataka High Court in the case of Commissioner of Customs, Bangalore v. Shilpa Trading Company, 2014 (309) ELT 641 [Kar.] in support of his sub .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

pter-X of CBEC's Excise Manual . However, the respondent-Unit did not make payment and therefore, the duty leviable was confirmed, which came to be accepted by the respondent-Unit. It is submitted that therefore, as the dues were adjudged by the Adjudicating Authority on the ground that the respondent being a 100% EOU, diverted the goods illicitly in the open market and the raw materials which were procured by forgoing Customs duty were not used for the purpose for which they were imported, .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he aforestated decisions and submissions made, it was requested to allow the present Appeal and answer the question in favour of the Revenue and against the respondent-Unit. 4. Shri Hardik P. Modh, learned advocate appearing on behalf of the respondent-Unit submitted that in the facts and circumstances of the case, more particularly when even at the time of adjudication proceedings/show cause notice, the goods were not available for confiscation, and therefore, the learned Tribunal has rightly h .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

fore, before the goods are confiscated, the seizure is sine quo non and Section 125 of the Customs Act shall be applicable in a case where goods are confiscated, but not available at the time of adjudication, and in that case, only redemption fine can be imposed. It is submitted that therefore in the present case, as the goods were neither seized and consequently not confiscated, there is no question of imposing redemption fine under Section 125 of the Customs Act, 1962. 4.2 Shri Modh, learned a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

general bond in Form B-17 by the Unit and the same cannot be said to be a bond referred to under Section 125 of the Customs Act. It is submitted that there are different forms and under the Customs Law Manual, unless and until the goods are released on furnishing the bond, as per the Customs Manual, Section 125 of the Act shall not be applicable. 4.4 By making the above submissions and relying upon the above decisions, it was requested to dismiss the present Tax Appeal. 5. Heard learned advocat .....

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 which were procured by forgoing the Customs duty were not used for the purpose for which they were imported. From the material on record, it appears that when the respondent-Unit imported the goods and was permitted to ware house the goods in the private bonded warehouse without payment of the duty, the respondent-Unit furnished the Bond in form B- 17. In the said form, the respondent-Unit also agreed to abide by the conditions mentioned in the written Bond. The relevant condi .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s/Central Excise to have been used in the manufacture of articles for export and any penalty imposed under the Customs Act, 1962 of the Central Excise Act, 1944 and rules or regulations made thereunder, as the case may be. 11. We, the obligors, shall discharge all dues whether Central Excise duty or the lawful charge which shall be demandable on the goods obtained by us without payment of duty from the domestic tariff area and transported from the place or procurement to our premises for use in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ch other limitation and conditions as may be specified in this behalf by the Director General of Foreign Trade, pay duty of Excise leviable on such articles under Section 3 of the Central Excise Act, 1944 and duty of Customs & Central Excise leviable on the raw materials/ components parts used in the manufacture of such articles as are not allowed to be sold in India in accordance with the provision of Exim policy. 13. We, the obligors, shall comply with the conditions and limitations stipul .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ond shall continue to be in force, notwithstanding the transfer of goods to any other person or removal of goods from one warehouse to another. The said bond was also backed by an undertaking. On execution of such bond and the conditions mentioned in the bond, the respondent-Unit was permitted to warehouse the goods without payment of any duty. 5.2 It is an admitted position that thereafter, the respondent-Unit clandestinely removed the goods and thereby committed breach of condition by divertin .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

for the time being in force, and shall, in the case of any other goods, give to the owner of the goods, an option to pay in lieu of confiscation such fine, as the said Officer thinks fit. 5.4 As observed hereinabove, on the respondent-Unit diverting the goods illicitly into the open market and the raw materials which were procured by forgoing the Customs duty were not used for the purpose for which they were imported, the Customs authorities were authorized to confiscate such goods which are il .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

iscation of such goods was authorized, Section 125 of the Customs Act shall be applicable. However, as the goods were not available for confiscation at the time of adjudication, as the same were already released on bond and/or permitted to be warehoused without payment of duty on furnishing the bond and undertaking, redemption of fine in lieu of confiscation was imposable. 5.5 Under the circumstances, considering the decision of Apex Court rendered in case of Weston Components Limited [Supra] an .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

tion Inc. [Supra] and the subsequent decision of the said High Court in the case of National Leather Cloth Mfg. Company [Supra] are concerned, on facts, the same shall not be applicable to the facts of the case on hand, since in the matters before the Bombay High Court, there was no bond/legal undertaking executed. The submission made on behalf of the respondent-Unit that unless and until the goods are first seized, there is no question of confiscation and consequently, there is no question of 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

 

 

 

 

 

Discussion Forum
what is new what is new
 


Share:            

|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members ||

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

Go to Mobile Version