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of <h1>Tribunal upholds duty demand on company, penalty dropped for lack of evidence on individual</h1> The Tribunal upheld the duty demand and penalty on M/s. Laddan Steelware Mfg. Co. for failing to comply with advance license conditions but set aside the ... EXIM - Penalty on importer - Evidence Issues involved: Confiscation of imported goods, diversion of raw material, imposition of duty and penalties under Customs Act.Confiscation of Imported Goods: The Commissioner of Customs ordered the confiscation of imported goods, including SS coils and utensils, under Section 111(o) of the Customs Act. The goods were claimed to have been diverted and not used in accordance with the relevant provisions.Diversion of Raw Material: The appellants argued that the imported raw material was not diverted and was used in the manufacture of specified goods as required by the advance license scheme. They contended that the raw material was taken from a storage facility due to space constraints, and therefore, the diversion allegation was unfounded.Imposition of Duty and Penalties: The Revenue contended that the imported raw material was not used as per the conditions of the advance license, leading to the imposition of duty and penalties. Samples of SS utensils were found to not be made from the imported raw material, supporting the duty demand and penalty imposition.Judgment: The Tribunal upheld the impugned order confirming the duty demand and penalty on M/s. Laddan Steelware Mfg. Co. for failing to comply with the conditions of the advance license. However, the penalty imposed on Shri Sanjay Jain of Metal Sales Corporation was set aside as there was no evidence of his involvement in the diversion of duty-free raw material. The appeal by M/s. Laddan Steelware Mfg. Co. was dismissed, while the appeal by Shri Sanjay Jain was allowed.Conclusion: The Tribunal found no infirmity in the duty demand and penalty on M/s. Laddan Steelware Mfg. Co. for not using the imported raw material as required. However, the penalty on Shri Sanjay Jain was deemed unsustainable due to lack of evidence linking him to the diversion. The judgment highlights the importance of complying with advance license conditions and the burden of proof on importers to demonstrate proper use of duty-free raw materials.
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