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TMI Blog2022 (2) TMI 468X X X X Extracts X X X X X X X X Extracts X X X X ..... s of 'Export Oriented Unit Scheme' (EOU) as envisaged under Export Import Policy/Handbook of Procedures, the appellant applied for permission to establish a new undertaking at Noida Export Processing Zone, Noida for the manufacture of plain gold jewellery, and vide letter of authorisation dated 16.05.2001 issued by Deputy Development Commissioner (at the relevant time, the appellant- Shri Ajit Singh was Proprietor of M/s Ajit Exports). The approval was for projected export turnover of US$ 64,26,000 in 5 years, subject to penal action, in case of failure to achieve minimum export performance. Accordingly, the appellant entered into an agreement/indemnity bond. Under the agreement, the appellant was obliged to submit to the Deputy Development Commissioner, 'quarterly performance report' and also 'annual performance report' duly certified by a Chartered Accountant. Thereafter, the appellant established its business at premises SDF No.D-8, Noida EPZ, Noida by procuring Plant & Machinery such as wire machine, polishing unit and other tools etc. for the manufacture of gold jewellery. The appellant not only achieved the minimum export performance and minimum net Foreign Exchange earnings, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s were carried out and made, to the satisfaction of NSEZ Customs Authority as stipulated in the permission letter, self-certified layout plan of building was also submitted. The appellant also fulfilled the other conditions, such as maintaining of separate records and accounting of transactions. The appellant was regularly achieving minimum export performance as prescribed in Foreign Exchange Earning (NFE) and was also making other statutory compliances. No objection in this regard was ever made by the jurisdictional authorities. 6. By letter dated 19.01.2005 issued by the Asstt. Development Commissioner, the appellant was granted approval for the following operations: - (i) Plain gold jewellery; (ii) Import of old/idle/outdated gold jewellery for melting and remaking into finished products for export. 7. By letter dated 14.12.2006, the Assistant Development Commissioner, NSEZ, Noida conveyed permission to the appellant to manufacture the following items: - (i) Plain Gold Jewellery; (ii) Import of old/idle/outdated gold jewellery for melting and remaking into finished product for export; (iii) Studded gold jewellery & studded silver jewellery; (iv) Import of mountings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng that the gold jewellery sought to be exported is made out from the stock available in the corresponding bill of entry, as recorded in the import register, the documents were handed over back to the appellant. Export consignment along with invoice, packing list and shipping bill was then handed over to the Preventive officer, Customs and after preparation of report, the same was then handed over to the CWC, and then the same was cleared from exit gate of SEZ only after issuance of 'discharge certificate' by customs. This procedure was in accordance with the provisions contained under Rule 46(2) of Special Economic Zone Rules, 2006. 12. That as explained above, the appellant was legally importing old/outdated/idle gold jewellery and the same was handed over to Appellant firm- M/s Ajit Exports, only after mutilation, inspection and recording in the import register. After remaking/refurnishing/manufacturing, the gold jewellery was exported by the appellant under self-sealing/self-certification procedure, wherein the export consignment was always open for physical examination by the Customs Department. However, at no point of time, M/s Ajit Exports was ever found to have indulged in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elting, instead of 'outdated gold jewellery for melting and re-making' as declared in the import documents. Panchnama also records seizure of i) 24,746 grams of gold jewellery (imported vide Bill of Entry No.00622/09 dated 4.2.2009) and ii) brass circles, iron scrap and brass scrap/cuttings weighing 193.676 Kg. B. Business premises of VEJPL at 2127/28, Gali No.48, Naiwala, Gurudwara Road, Karol Bagh, New Delhi. During the course of search at business premises of VEJPL, the officers of DRI, New Delhi, seized assorted gold jewellery weighing 41,315.05 gm valued at Rs. 5,57,75,277/- on the ground that no evidence documentary or otherwise, was produced for the licitpossession/ acquisition of the same. C. Residential premises of appellant-Ajit Singh (Partner of AE) 127, 1st floor, Vaishali, Pitampura, New Delhi. During the search, assorted gold jewellery consisting of 36 sets of ear tops & lockets and 109 pairs of ear tops, collectively weighing 822.17 gm was seized. D. Business premises of one M/s Omkar Jewellers, 2502, Beadonpura, 2nd Floor, Gurudwara Road, Karol Bagh, New Delhi. During the search gold bars/ pieces of gold of foreign origin weighing 8.905 kg. gold pieces weighin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10 was issued to AE and others demanding customs during and cess amounting to Rs. 2,61,36,747/- and also proposing confiscation of seized goods and imposition of penalty. 18. That during investigation, statements of the following persons were also recorded: Sl.No Date Name 1 7.2.2009 8.6.2009 14.1.2009 Sri Bharat JamnadasJagda (Director of Shakti Jewellers & Partner of Omkar Jewellers) 2 7.2.2009 22.4.2009 Kamlesh Bhimraj Jain (alleged Purchaser of jewellery) 3 22.4.2009 Shri Kiran Kumar Singhvi (alleged purchaser of Jewellery) 4 22.4.2009 Sri Hemraj C. Kothari (alleged purchaser of jewellery) 5 22.4.2009 Sri Ramesh Rathod (alleged purchaser of jewellery) 6 22.4.2009 Sri Nitesh Jain (alleged purchaser of jewellery) 7 7.2.2009 22.4.2009 Sri Suresh Bhanwarlal Rathod (alleged purchaser of jewellery) 8 7.2.2009 22.4.2009 Sri DevilalSohanlal Jain (alleged purchaser of jewellery) 9 23.4.2009 Sri SumitShivkumar Agarwal (person to whom Sri Bharat Jagda allegedly made payments in cash on instructions of Sri Kishore Dhakan) 10 31.8.2009 Sri Mahesh Kumar Moolchand Kothari (Partner of Sri Bharat JamnadasJagda) 11 4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is relevant to mention that the show cause notice dated 12.11.2013 was issued to M/s.V.S. Jewellers and 34 co-noticees, which included the present appellants also, wherein show cause notice, inter alia , proposed or alleged the following :- (i) The duty free gold jewellery imported by M/s. Ajit Exports, Noida during 2006 to February, 2009, by mis declaring and undervaluation, which were clandestinely removed from the SEZ unit as such, without carrying out any process, without payment of customs duties and delivered/sold to the buyers in the local market/DTA, should not be held liable for confiscation under Section 111(d), (j), (m) and (o) of the Customs Act, 1962. (ii) The duty-free primary gold/gold bars procured by M/s Ajit Exports, Noida from Bank of Nova Scoatia, New Delhi, which were clandestinely removed from the SEZ unit, as such, without carrying out any process, without payment of customs duties and delivered/sold to the buyers in the local market DTA, is liable for confiscation under Section 111(d), (j) and (o) of the Customs Act, 1962. (iii) The benefit of exemption granted under Section 26 of the SEZ Act, 2005 read with Rule 25, 27 and 34 of SEZ Rules, 2006 fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner of Customs, ICD, CONCOR Complex, Greater Noida, U.P. 22. The allegations of the Revenue in the show cause notice(s) are as follows: - 22.1 The appellant, M/s Ajit Exports appears to be exporting brass/iron scrap or brass jewellery by declaring the same to be gold jewellery. After having been authorised to manufacture and export in the SEZ, and the benefit of such exports was to flow to one M/s Gold Stone Exports Ltd. Thus, show cause notice proposed to impose penalty on Gold Stone Exports under various sections of the Act. 22.2. Out of 15 packages seized from the business premises of M/s Ajit Exports/Vee Ess Jewellery, 13 packages pertained to export consignments and remaining 2 packs pertained to import consignments. The export packs were ready for exports dulysealed as per procedure. The documents/shipping bill have had already been filed with the SEZ Authority and the assessment was got done by the competent authority. However, on subsequent examination by Jewellery Appraiser (after seizure), the packages were found to contain iron scrap/brass circles/brass scrap/cuttings in rectangular forms weighing 193.676 kgs. (having negligible commercial value). 23. Two pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penses, that on the advice of Komal Jain, the firm - M/s Ajit Exports was converted into partnership firm by taking Mr. Kirti Jain as partner (younger brother of Komal Jain). The work of M/s Ajit Exports was continued to be looked after mainly by Mr. Komal Jain. This appellant is more or less a sleeping partner. That the idea of sharing premises of office with M/s Vee Ess Jewellers Pvt. Ltd. at 197-198, NSEZ, Noida, was also of Komal Jain and due permission was granted by the Assistant Development Commissioner, that M/s Ajit Exports is importing gold jewellery from Deepu Jewellers, Dubai (Director, Mr. Kishore Dhakan), M/s. Samrah Gold, Sharjah, and M/s. Mahesh & Co., Singapore (owner - Mahesh Kumar), that Komal Jain has got introduced him with the aforementioned persons. He further stated that he was not having documents relating to jewellery seized from his residence on 6.2.2009. He further stated that they were importing damaged and/or old jewellery for re-making, re-polishing, etc. and thereafter re-exporting the same, and he did not know much about the day-to-day business as the same was being looked after by Mr. Komal Jain as well as by Mr. Kirti Jain. 28. On being asked if ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he purpose of exports. However, they had not provided any confirmed order to M/s Ajit Exports for export of gold jewellery, nor they had received any export realization on account of the exports made by M/s Ajit Exports. Further, stated that their company had not exported or sold any gold and gold jewellery, though the invoice was raised in their account. He further, stated that they did not have any business relations with M/s. Samrah Gold Factory, Sharjah and nor they had business relation with M/sMahesh and Company, PTE Ltd., Singapore. 33. Similar statement was given by Shri Shashi Kumar, Managing Director of M/s. Goldstone Infratech Ltd., 34. That Shri Ajit Singh, Partner of M/s Ajit Exports vide his letter dated 14.09.2009 addressed to DRI (Hqrs), New Delhi submitted that on 4.2.2009, he found some jewellery missing from his business premises at Plot No.197-198, First Floor, SEZ, Noida and consequently, on 8.2.2009 he lodged a complaint of theft at Police Station, Noida. That he had come to know that the said jewellery has been stolen from his business premises byShri Komal Jain (Director of Vee Ess Jewellers) with the help of his real brother - Shri Kirti Jain (Partner in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d invoices in File No.164 seized from the M/s Ajit Exports, it appears that 15141 .310 gm of .920 fine gold jewellery was exported to Mahesh & Company, Singapore by M/s Ajit Exports as third party exporter-manufacturer - Gopal Sons Jewellers. 37. He further stated that the day-to-day functioning of M/s Ajit Exports was looked after by Shri Ajit Singh and Shri Komal Jain. That he was aware that on many occasions, M/s. Ajit Exports had imported brand new gold jewellery and exported only metal scrap materials and primary gold. He further stated that on many occasions, he had forged the signature of Shri Ajit Singh and signed the documents of M/s Ajit Exports viz. invoices, shipping bill, packing list, bill of entry, etc. That pursuant to export vide shipping bill dated 20.01.2009, M/s. Mahesh & Co. PTE Ltd., Singapore remitted USD 4,10,490 in the account of M/s Gopal Sons & Jewellers. The said amount was remitted back to M/s Ajit Exports. Further, he submitted that he had not invested any money in M/s Ajit Exports. That his brother, Shri Komal Jain made him Partner in M/s Ajit Exports. He further stated that although he was entitled to 25% share in the profits of M/s Ajit Exports, bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear 2006, Shri Ajit Singh and Komal Jain informed that they had started two units in the SEZ at Noida, which had facilities for refining, polishing, copper and rhodium finishing as well as repairing of jewellery. That they had also told him that their (M/s Ajit Singh and Komal Jain) prices would be more competitive as they would save income tax payable, by the units in the SEZ. That they used to get goods manufactured from M/s. Vee Ess Jewellers at Karol Bagh and also at SEZ, Noida as well as from M/s Ajit Exports, SEZ, Noida. Mr. Ajit Singh and Komal Jain used to tell him as to on which company, he had to place orders.That he also stated in the year 2006, Mr. Ajit Singh and Mr. Komal Jain suggested him that he could despatch old and used jewellery as they also had refining facility. They also told him that he could manage to send them high end branded jewellery, and in turn, they would replace the same with Indian make jewellery, to which he was agreed. While exporting outdated gold jewellery, they used to prepare packing list, invoice and airway bills. Thus, he was despatching old used gold jewellery and also high-end branded gold jewellery, and in turn, he used to receive Indian ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... foreign made branded, finished new jewellery into India from Dubai/Sharjah/Singapore in the guise of duty free import of raw materials through SEZ route, on the pretext of using the same for manufacture of gold jewellery to be exported, but it appears have diverted the same clandestinely in the local market. Both Appellant and V.S. Jewellers were SEZ units located at the same premises at Noida SEZ. Both the SEZ units were permitted to import duty free semi-finished or old/ outdated gold jewellery for assembling/ plating /refinishing and/or remaking, and thereafter the same was required to be re-exported after completing the process required to be carried out, as per the direction of the Supplier (as declared in the bill of entry/packing list at the time of importation). The details of the process to be carried out on the imported gold jewellery as declared in the import documents clearly indicate that the same jewellery was required to be exported, as the major portion of such jewellery was being imported for carrying the process, which did not amount to change of shape and design. 41. However, the Appellant M/s Ajit Exports & M/s V.S. Jewellers appeared to have clandestinely rem ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jewellery or finished jewellery which they were diverting in the DTA, thus evading customs duty on import in the garb of reprocessing in their Unit situated at Noida SEZ, and were re-exporting Indian made jewellery etc., which was violation of the scheme under the SEZ Act and the notification thereunder. Most of the files found/seized from the business premises of M/s Ajit Exports and V.S. Jewellers regarding the export and import, bore some remarks on the file cover indicating the actual nature of goods procured from the local market and exported in that particular consignment. Copies of the export documents are available in the particular file. Such remarks on the files are also corroborated by the fax messages received from the local supplier of the goods namely M/s Shakti Jewellers Pvt Ltd., Mumbai and handwritten calculation on papers found available in the file. Such handwritten calculations were in the handwriting of Mr. Komal Jain of V.S. Jewellers, who during the course of investigation was found to be looking after the entire day to day working of both M/s Ajit Exports & V.S. Jewellers. Mr. Komal Jain in the course of his statement tendered before the authority have admit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder Section 28 of the Customs Act, the declared transaction value of duty free imported gold jewellery (including past imports) has been rejected under Customs Valuation Rules, duty free gold jewellery and gold bars alleged to be clandestinely removed into DTA have been confiscated, exemption available under Section 26 of SEZ Act has been denied and the exempted amount of Custom duty has been directed to be recovered under Section 28 of the Act, the amount deposited during investigation have been appropriated and penalties have been imposed upon the appellants and others. 47. The impugned order-in-original (in earlier round) was challenged in separate appeals by these appellants, as well as nine other appellants/ co-noticees before this Tribunal. The appeal of these appellants was allowed by way of remand in the earlier round of litigation by this Tribunal, in view of the jurisdiction issue as clarified by Delhi High Court in the case of Mangli Impex vs. Union of India. Thereafter, in the re-adjudication proceedings the present order-in-original dated 18.10.2018 have been passed. 48. The appeal of the other co-appellants before CESTAT being Customs Appeal Nos. 70148/2019 and oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial Economic Zone, the appellant's firm was authorized to import old/ idle/ outdated gold jewellery for melting and re-making into finished product for export. Thus, import of not only old jewellery but also outdated or out of fashion jewellery was permitted. Since the goods or imported jewellery was outdated in the country of origin (Dubai and Singapore), hence the same was declared as outdated gold jewellery, also at times such jewellery appears, to be new. Therefore, the report of jewellery appraiser that the imported consignments seized from the SEZ Unit,contained new jewellery, does not in any manner support the case of Revenue. 52. Learned Counsel further urges that the allegation of clandestine removal of imported jewellery from the SEZ Unit is incorrect, presumptive and not supported by any evidence. 53. Movement of goods from SEZ to DTA is restricted and is only possible after checking by and with the prior permission of the authorized officer (Officers of the Customs). For obtaining such permission, it is required to submit import license (Rule 47 (a) of SEZ Rules) and presentation of Bill of Entry by the DTA buyer (Rule 48(1) of SEZ Rules). Therefore, alleged clandesti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rejection of declared value under the Customs Valuation Rules read with Section 14 is illegal and bad. The value of the imported goods declared by the importer can be rejected under Section 14 of the Act read with Rule 12 of the Valuation Rules, only if - (i) the Proper Officer has reason to belief or doubt the truth or accuracy of the value declared or; (ii) on request of the importer. Once the allegation of mis-declaration at the time of import are not sustainable, then the proper Officer cannot have any reason to doubt the truth or accuracy of the value declared and there was also no such request from the appellant's firm. 55.2 It is further urged that the Officers of DRI (who issued the show cause notice) and the Adjudicating Authority are not competent to deny the exemption under Section 26 of the Special Economic Zone Act. 56. The Special Economic Zone Act being a special law (having overriding effect on other tax laws etc.), the jurisdiction to deny benefit / exemption under Section 26 and thereafter demand duty under Section 30 is conferred on the specified Officer posted in the Special Economic Zone alone. Whereas, the Officers of Customs - DRI and the jurisdictional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f seizure was vested in such DRI Officers vide Notification No. 2666 dt. 05.08.2016, and thus the seizure itself is patently illegal. Prior to 05.08.2016 such powers of inspection and seizure was vested only on the specified Officer (by Notification) under Section 20 and/or 21 of the Special Economic Zone Act read with the Customs Act. 60. The confiscation of aforementioned jewellery under Section 111 (j) and (o) is illegal as the two imported consignments were allowed to be cleared for processing/ manufacture in the SEZ unit by the proper Officer, and there was no occasion for the appellant not to observe the conditions for exemption. That is, using the imported goods/ gold jewellery in re-making of gold jewellery for export. Further, the two consignments in question were seized even before the same were opened or inspected. 60.1 The confiscation of 822.17 gm of gold jewellery from the residence of Shri Ajit Singh (appellant) is also illegal, inasmuch as it was alleged by the revenue that the same was seized on the reasonable belief that it was manufactured out of clandestinely cleared imported gold jewellery, whereas Revenue have failed to prove its allegation of clandestinely ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Office. It is the case of these appellants that such jewellery was stolen from the premises of the appellant firm by Shri Komal Jain in collusion with his brother Shri Kirti Jain and the staff of their company Shri Vikas Sharma. After stealing, these persons replaced the gold jewellery with brass jewellery/ scrap. These appellants have also filed FIR before the Police at Noida of such theft committed bythe named persons, being FIR dated 08.02.2009. 60.6 Even if adverse inference is drawn in respect of 13 export packages, then also the offence can only be that of mis-declaration, for which penalty under Section 114 can be imposed. Since iron scrap and iron are not prohibited goods, hence quantum of penalty cannot exceed 10% of duty sought to be evaded or Rs. 5,000/-, whichever is higher. As no duty was payable, hence, the quantum of penalty cannot exceed Rs. 5,000/-. 61. Opposing the appeals, learned Authorised Representative appearing for the Revenue relied upon the findings recorded by the Adjudicating Authority in the impugned order. He further urged that there is mis-declaration in the import consignments and as per the statement of person(s) brought on record during investiga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o finished product for export. Such outdated jewellery or out of fashion jewellery may also appear at times to be new.Once this is so,we fail to understand how the report of jewellery appraiser supports the allegation of mis-declaration. The report of jewellery appraiser nowhere states that the jewellery was not outdated, but it states that the jewellery was appearing as new. Thus, all that glitters is gold. Thus,we hold that the report of jewellery appraiser does not advance or support the allegations of Revenue. 62.4 Further, it is admitted case on facts that during the period in question, the proper Officer of Customs / Special Economic Zone regularly assessed the Bills of Entry filed by these appellants and on finding the same to be tallying with the declaration made in the Bill of Entry allowed the import, each and every time. Never before any mis-declaration was found. There is no allegation by Revenue that these appellants were in collusion with such proper Officer of the Customs / Special Economic Zone. Once this is so then the allegations in the case set up by Revenue regarding mis-declaration in the import consignments is clearly presumptive and not based on any cogent e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on record to show that any discrepancy was found either in the import or export consignment of the two SEZ units. Neither it is Revenue's case that the Customs Officers connived with the SEZ units who clear their consignment for import or export without examination. The assessment having been done by the Customs at the time of import of gold jewelry from Dubai, Singapore or other countries and at the time of the export of remade jewelries to the said countries and having not been revoked by the proper officer under the provisions of Customs Act, we really fail to understand as to how Revenue can allege to the contrary and impose penalties upon the appellants". 62.6 In view of our findings recorded hereinabove which are also fortified by the findings by the Coordinate Bench at Allahabad, on the allegations or issue of mis-declaration, we hold that the question of rejection of transaction value also does not survive against the appellants. We further find that the Bills of Entry were duly assessed by the proper Officer of Customs in accordance with law and such order of assessment have not been reviewed or challenged by the Revenue. 63. Now coming to the next issue as regards the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d how the fax messages supports the case of clandestine removal in the local market, when the fax message was sent by a person from outside the country. At best, the same may lead to inference that the appellant firm exported goods of M/s V.S. Jewellers Pvt. Limited against its export invoices, but the same does not prove the charge of clandestine removal of imported gold jewellery in the local market. 64.2 As far as the fax messages allegedly sent by M/s Shakti Jewellers Pvt. Ltd., are concerned, the Coordinate Bench of this Tribunal in its Final Order dated 12.09.2019 have already held that the same were not related to M/s Shakti Jewellers Pvt. Limited. On the face of this finding such fax message cannot be relied upon against these appellants, when the person who sent these fax messages and the contents thereof, are not established by the Revenue. The fax machine was also being used by other / neighbours, as stated in the statement of the Director of M/s Shakti Jewellers. 64.3 Now coming to the alleged parallel invoices, we find that the show cause notice alleges only two sets of export invoices, as parallel invoices. In respect of these, the explanation given by the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng cross-examination, which have been rejected without any cogent reason or order. Therefore, we hold that all these statements recorded during investigation have to be ignored and the same cannot be read as evidence in support of the allegation, in the show cause notice. We refer to the similar views taken by the coordinate Bench at Allahabad in the aforementioned Final Order dated 09.07.2019, we reproduce para 27 from the said order: - "27. At this state we may refer to certain precedent decisions on the issue of the findings of clandestine activities based upon the statements of various deponents, who have not been allowed cross-examination. The Hon'ble Supreme Court in the case of Andaman Timber Industries v. Commissioner of C. Ex. Kolkata-II reported as MANU/SC/1250/2015, while dealing with the cross-examination of the witnesses observed that not allowing the assessee the cross-examination of witnesses is a serious flaw which makes the order nullity inasmuch as the same amounts to violation of principles of natural justice because of which the assessee was adversely affected. The Hon'ble Supreme Court further observed that when the assessee disputed the correctness of the st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r take note of the admitted facts that the movement of goods in and out of the SEZ, or from the SEZ to the domestic tariff area restricted subject to approval. It is also not the case of the Revenue that the appellants have connived that the Officer of the Customs or the Special Economic Zone who were monitoring the movement of the goods. In absence of any cogent evidence and any allegation of connivance, we hold that the allegations of clandestine removal are clearly presumptive. We further observe that the charge of clandestine removal is a serious charge and the same cannot be upheld merely on the basis of assumption and presumption. Applying this principal, the demand confirmed in the impugned order under Section 28 of the Act, by denying the exemption under Section 26 of the SEZ Act cannot be sustained and accordingly we set aside the same. 64.7 Once the allegation of mis-declaration, clandestine clearance, denial of exemption under Section 26 being set aside and decided in favour of the appellants, we hold that the imposition of penalties against these appellants also cannot be sustained. Accordingly, we set aside all the penalties imposed on the appellants. 65. Now, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Government should be entrusted with functions of the Customs officers, it was imperative that the Central Government should have done so in exercise of its power under Section 6 of the Act. The reason why such a power is conferred on the Central Government is obvious and that is because the Central Government is the authority which appoints both the officers of the Directorate of Revenue Intelligence which is set up under the Notification dated 04.12.1957 issued by the Ministry of Finance and Customs officers who, till 11.5.2002, were appointed bythe Central Government. The notification which purports to entrust functions as proper officer under the Customs Act has been issued by the Central Board of Excise and Customs in exercise of non-existing power under Section 2(34) of the Customs Act. The notification is obviously invalid having been issued by an authority which had no power to do so in purported exercise of powers under a section which does not conferany such power." 68. We further note that in the present case, it is the officer of DRI, who has issued the show cause notice demanding duty and penalty under Section 28 of the Customs Act, which power can be exercised ..... X X X X Extracts X X X X X X X X Extracts X X X X
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