TaxTMI 
TaxTMI 
2007 (4) TMI 427
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....when the appeal was called out for hearing. We have gone through the relevant record and also the contentions sought to be raised by the appellant with the assistance of the learned Authorized Representative of the Department and have heard him on merits. 3. It appears that the Revenue received information that Sanjeevani Fodder Production Pvt. Ltd. and Fometa India Machines Pvt. Ltd. had evaded Customs duty of Rs. 3 crores by contravening the conditions of the ad hoc Exemption Order No. 103/87 dated 30-3-1987. By that order, the Government, in exercise of powers under Section 25(2) of the Customs Act, 1962, exempted 50 FPUs valued at US $ 32,00,000/- (CIF), imported by Sanjeevani Fodder Production Pvt. Ltd., from payment of duty of Customs, auxiliary duty of Customs, and the additional duty, subject to the conditions mentioned therein. These conditions were as follows : "(i) M/s. Sanjeevani Fodder Production Pvt. Ltd., Bombay, should donate these 50 FPUs to BKS within 15 days from the date of clearance of the goods and produce necessary documentary evidence to this effect to the satisfaction of the Collector of Customs of the concerned Customs House; a....
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....ow cause why the two FPUs purchased by them from Fometa India Machines Pvt. Ltd., which were manufactured by them by mis-utilising the spares, should not be confiscated under Sections 111(d) and (o) and 120 of the Customs Act, 1962. By the reply dated 20th April, 1990, the appellant - Directorate of Agriculture, took up the plea that it was a bona fide purchaser of two FPUs and, therefore, they (FPUs) were not liable for confiscation. According to the appellant, quotations were received from Fometa India Machines Pvt. Ltd., in which it was not mentioned that the goods were not imported, and in the invoice, it was stated that, the goods were exempted from Central excise duty. These machines were used in Central Sheep & Wool Research Institute and National Research Centre on Camels, which are Government institutions and 90% of the price of these machines was paid by Fometa India Machines Pvt. Ltd. It was, therefore, pleaded that the goods be released without confiscation. 6. The Collector rejected the contention of Fometa India Machines Pvt. Ltd. that the conditions of the exemption did not attract the spares, which were imported by Sanjeevani Fodder Production Pvt. Ltd. It w....
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....ne on the present appellant, while reducing it from Rs. 4 lacs to Rs. 1 lac. 9. We have already noted the contentions raised on behalf of the appellant against confiscation and redemption fine. According to the appellant, they were bona fide purchaser for value without notice and, therefore, the goods were not liable for confiscation. 10. It has been contended on behalf of the Revenue by their Authorised Representative that, such goods were liable to be confiscated even when they were sold to a bona fide purchaser for value without notice. In support of this contention, he relied upon the decision of the Hon'ble Supreme Court in Sachidananda Banerjee, A.C.C., Calcutta v. Sitaram Agarwala, reported in 1999 (110) E.L.T. 292 (S.C.); the Larger Bench of this Tribunal in L.D. Textile Industries v. Commissioner of Customs, Ahmedabad, reported in 2005 (190) E.L.T. 174 (Tri.-LB); and D.A. Srinivasulu v. Commissioner of Customs, Mumbai, reported in 2006 (202) E.L.T. 69. He further submitted that, there was a guideline in Section 125, which prescribed the maximum limit of redemption fine to be the market value with adjustments indicated therein. According to him, since Rs. 20....
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....nfiscation. This provision is applicable where the smuggled goods are mixed up with other goods as contemplated by sub-section (2) of Section 120, in a manner that the smuggled goods cannot be separated from the other goods. Therefore, ordinarily, whole of the goods from which the smuggled goods cannot be separated, will be liable to confiscation. When the owner of the goods does not have any guilty mind or any reason to believe that smuggled goods are included in the goods owned by him, the whole of the goods will not be liable to confiscation. In the present case, admittedly, the Directorate of Agriculture Rajasthan was a bona fide purchaser and totally unaware of the fact that imported spares, in respect of which breach of condition of the exemption was committed, were used in the manufacture of two FPUs which were sold to them by Fometa India Machines Pvt. Ltd. It is well settled, as held by the Hon'ble Supreme Court in Sachidananda Banerjee, A.C.C. Calcutta v. Sitaram Agarwala (supra) that, goods which have been imported against the apprehension or restriction imposed under Chapter IV of the Act, are liable to confiscation at any time after import and this liability extends ev....