Duty recovery and confiscation order set aside for exported granite blocks under Notification 32/97-Cus

CESTAT Chennai set aside Commissioner (Appeals) order directing duty recovery and goods confiscation for imported granite blocks. Appellant imported rough granite, processed into monuments/vases, and exported after job work completion. Though appellant was ineligible for Notification 32/97-Cus benefits, duty demand couldn't sustain as goods were already exported. Following SC precedent in Sankar Pandi v. Union of India, confiscation was held improper when goods unavailable due to re-export. Original adjudicating authority's order restored, appeal allowed.

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Issues:
1. Eligibility for benefit of Notification No. 32/97-Cus.
2. Confiscation of goods imported.
3. Recovery of duty on imports.
4. Imposition of penalty under Section 112(a) of the Customs Act, 1962.

Analysis:

Eligibility for benefit of Notification No. 32/97-Cus:
The appellant imported rough granite blocks without the required license from the DGFT and purchased them from a foreign supplier, contrary to the conditions of Notification No. 32/97. The original authority allowed the benefit initially but imposed a penalty under Section 112(a) of the Customs Act, 1962. The Commissioner (Appeals) reversed this decision, holding the appellant ineligible for the notification. The appellant conceded their ineligibility due to not importing goods free of cost. The Tribunal agreed and set aside the Commissioner's decision, noting that duty demand cannot be sustained as the goods were exported after job work.

Confiscation of goods imported:
The Commissioner (Appeals) directed confiscation of goods imported, but the Tribunal found this improper as the goods had already been exported after job work. Referring to legal precedent, the Tribunal held that when goods are re-exported and unavailable, confiscation is not valid. The order for confiscation was set aside, emphasizing that the goods' unavailability precludes confiscation.

Recovery of duty on imports:
The Commissioner (Appeals) ordered the recovery of duty on imports made on two Bills of Entry. However, the Tribunal found this direction unsustainable as the goods had been exported post-import. The Tribunal set aside the order, emphasizing that duty recovery was not viable due to the goods' exportation.

Imposition of penalty under Section 112(a) of the Customs Act, 1962:
The original authority had imposed a penalty of Rs.25,000 under Section 112(a) for the appellant's lack of license during a previous import. The Tribunal upheld this penalty, noting that the appellant did not appeal against it, and it had attained finality. The penalty was deemed appropriate and sustained by the Tribunal.

In conclusion, the Tribunal allowed the appeal, setting aside the Commissioner (Appeals) order and restoring the original authority's decision. The penalty under Section 112(a) was upheld, while directions for duty recovery and confiscation of goods were deemed unsustainable due to the goods' exportation post-import.

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