TMI Blog2000 (4) TMI 97X X X X Extracts X X X X X X X X Extracts X X X X ..... ses of use in the manufacture of jewellery for export out of India by 100% EOU established in the above Special Export Oriented Complex were exempt from customs duty and additional customs duty, subject to the conditions laid down under the Notification. Gold was one of the goods specified for such import. M/s. Metal and Minerals Trading Corporation (in short MMTC) was the nominated agency to import gold for being supplied to the jewellery units in JJC including M/s. Delco. MMTC had obtained a private bonded warehouse licence for the said purpose and had also executed a general bond in respect of gold etc. imported and warehoused. The bond was subject to the condition, inter alia, that MMTC would produce to the satisfaction of the Assistant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uent to a visit by Customs Officers to the premises of the EOU, the only charge levelled against the appellants was that they had unauthorisedly removed from the JJC a quantity of 12 Kgs. of duty-free gold valued at Rs. 40,68,890/- (CIF) and, therefore, they were liable to be penalised under Section 112 of the Customs Act, 1962. The appellants contested the allegations by way of a detailed reply to the show cause notice. The Commissioner of Customs, who adjudicated the matter, imposed penalties of Rs. 4 lacs, Rs. 50,000/- and Rs. 50,000/- on appellants No. 1, 2 3 respectively under Section 112 of the Customs Act as per order dated 29-1-1999. This order of the Commissioner is under challenge in the present appeals. 3. I have carefully ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ambiguity. The present case is not a case where a wrong provision has been quoted, so that it can be stated that it was due to a bona fide error, which did not vitiate the jurisdiction of the Authority. As stated above, this is a case where there has been a failure to apply the mind as to which of the clauses is relevant and would be attracted. The power and the discretion given to the Authority functioning under Section 112 of the Act are judicial in character and are open to Judicial review, and if they are found to have been exercised on irrational and ambiguous basis, the court will strike down the orders." 5. Learned Consultant has further submitted that there is absolutely no evidence on record to substantiate the charge levelled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing clandestinely removed any gold. In other words, the Commissioner wanted a proof of the negative. On the other hand, the burden was on the Department to establish the charge in the show cause notice by means of cogent proof of the positive viz. unauthorised and clandestine removal of duty-free gold from the JJC. I find that the Department has failed to establish any unauthorised and clandestine removal of the gold from the EOU premises. In this view of the matter, the decision of the lower authority imposing penalties on the appellants under Section 112 of the Customs Act cannot be sustained. It is a peremptory requirement of Section 112 for imposition of penalty that the goods in question should be liable to confiscation under Section 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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