2000 (8) TMI 756

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...., they had imported capital goods for manufacture of shoe uppers. These capital goods were imported under the Customs Notification covering imports of capital goods by 100% Export Oriented Unit under Notification No. 27/97-N.T., dated 7-7-1997. The officers visited the premises of M/s. Gurdarshan Leather and found manufacturing activity of shoe uppers taking place in the premises with the assistance of capital goods imported by the 100% Export Oriented Unit without payment of duty. It was noticed that they had already cleared goods on which an amount of Rs. 1,05,195/- Central Excise Duty was payable. They also found certain goods fully manufactured. Those goods were seized and subsequently confiscated but at the same time, they were allowed....

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....d, they have reluctantly paid Central Excise Duty amounting to Rs. 1,05,195/- but their main objection was that a penalty of Rs. 10 lakhs was imposed on the 100% Export Oriented Unit under Rule 173Q read with Section 112 of Customs Act. It was submitted that even under Section 11AC, the maximum penalty was equivalent to the amount of duty normally revealed. He submitted that the penalty of Rs. 10 lakhs was excessive. Moreover, no penalty under Section 112 could be imposed by Commissioner of Central Excise because Section 112 can be administered only by Commissioner of Customs. Confiscation of the capital goods was also questioned in so far as jurisdiction is concerned, for M/s. Drish Shoes. It was argued that the goods were received and got....

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....ince the goods were being sold in the domestic tariff area, therefore, imposition of penalty was also warranted. Ld. DR also submitted that confiscation of 92 pairs of shoes was warranted and since the value of the shoes was Rs. 12,880/-, they commanded a good margin, therefore, redemption fine of Rs. 10,000/- cannot be termed to be excessive. In so far as confiscation of the capital goods is concerned, he reiterated the findings of the authorities below. 5. We have heard the rival submissions. On careful consideration of the submissions made we note that a SCN was issued the Commissioner of Central Excise. We note that with the issue of notification bifurcating functions in respect of Chandigarh Collectorate, the Commissioner of Ce....