2007 (1) TMI 344 - AT - Customs

Customs Tribunal: Upholds Duty Demands and Penalties in EOU Case

The Tribunal upheld the Commissioner of Customs' jurisdiction in a case involving duty demands and penalties for shortages in imported yarn by a 100% EOU. ... Adjudication - Territorial Jurisdiction - Penalty - Imposition of - Redemption fine - Quantum of Issues: Jurisdiction of the Commissioner of Customs, Penalty under Sections 114A and 112(b), Quantum of fine, Penalty justification for receiving goods from 100% EOU.Jurisdiction of the Commissioner of Customs:The case involved an appeal by a 100% EOU regarding shortages in imported yarn, leading to duty demands and penalties. The appellant argued that the Commissioner of Customs lacked jurisdiction to adjudicate the case under Section 72 of the Customs Act. They cited precedents like Ferro Alloys Corporation Ltd v. Collector and Raju Fabrics v. CC, Ahmedabad. However, the Tribunal found the Commissioner of Customs had jurisdiction over the matter as per the Customs Act, and the decision in Ferro Alloys was not applicable since the demand was issued by the officer in charge of the 100% EOU. The Tribunal also referenced Engee Services Industries Pvt. Ltd. v CC, Bombay regarding clandestine removal of goods, supporting the Commissioner's jurisdiction in this case.Penalty under Sections 114A and 112(b):The appellant contested the penalties imposed under Section 114A, arguing they should have been under Section 112(a for violations under Sections 111(o) and 111(j). The Tribunal agreed, setting aside the penalty under Section 114A. However, the duty amount was upheld due to the goods not being used for their intended purpose. The penalty under Section 112(b) for the appellant was deemed adequate at Rs. 30,000.Quantum of Fine:Regarding the quantum of fine, the Tribunal found the imposed fine of Rs. 5 lakhs justified given the nature of the case involving clandestine removal without duty payment, despite being lower than the value of the seized goods. No further relief was granted in this regard.Penalty Justification for Receiving Goods from 100% EOU:In the case of Shri R.R. Patel, who received goods from the 100% EOU knowing they couldn't be cleared for home consumption, the penalty under Section 112(b) was deemed appropriate at Rs. 30,000, with no need for interference.In conclusion, the appeals were disposed of with the Commissioner of Customs' jurisdiction upheld, penalties under Section 114A set aside, fines and penalties deemed appropriate based on the circumstances of the case.