TaxTMI 
TaxTMI 
2011 (3) TMI 1192
X X X X Extracts X X X X
X X X X Extracts X X X X
....ere imported at Chennai port and 1280 kgs at Mumbai port. At the time of import, the appellant had executed a bond with the Mumbai Customs and furnished bank guarantee for Rs 11,66,545/-. The imported goods were cleared duty-free in terms of Notification No. 80/95-Cus dated 31.3.95 which, under the DEEC Scheme, granted exemption from payment of Customs duty on the imported raw material subject to certain conditions, the chief condition being that the imported goods should be used in the manufacture of product to be exported in discharge of the export obligation of the importer under the scheme. Accordingly, the appellant was liable to use the imported raw material cleared at Mumbai and Chennai, in the manufacture of silk garments and to export the product in discharge of their export obligation under the above scheme. 2. The DRI launched investigations into the post-import conduct of the appellant. On the basis of the results of these investigations, two show-cause notices were issued to the appellant, one by the Commissioner of Customs (Mumbai) on 2.7.98 and the other by the Commissioner of Customs, Chennai on 30.6.98. These show-cause notices demanded Customs duty from ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... executed by M/s Global Art and enforced for Rs 11,.66,545/-. The balance amount left shall be adjusted towards penalty imposed on M/s Global Art; (iii) I order confiscation of 1280 kg of MRS imported by M/s Global Art having total CIF value of Rs 7,41,312/- under Section 111 (o) of the Customs Act, 1962. However goods are not available for confiscation; (iv) Penalty is imposed on the following persons/firms: (a) M/s Global Art - Rs 2,24,618/- under Section 114 A of the Customs Act, 1962. (b) Shri Bimal Kumar Mehra - Rs 2,00,000/- under Section 112 (a) of the Customs Act, 1962. (c) Shri Javed Alam - Rs 5,00,000/- under Section 112 (b) of the Customs Act, 1962." 7. In adjudication of the Chennai show-cause notice, the Commissioner passed the following order: "(a) In view of the above findings, the demand of Rs 9,08,157/- and interest of rs 2,57,716/- against M/s Global Art is confirmed. I order to adjust the same against the amount received from encashment of bank guarantee. (b) Since the goods are not available for confiscation, I hold the goods liable for confiscation, therefore, I impose a fine of Rs 25,00,000/- on M/s Global Art in lie....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rted by the appellant should be held to have been paid on the date of encashment of the bank guarantee. Where duty was paid prior to issuance of the show-cause notices, counsel argues, there could be no redemption fine or penalty. In this connection, he has relied on two decisions of this Tribunal viz (i) Pattu Exports Pvt Ltd vs Commissioner of Customs, Chennai 2007 (213) ELT 545 (Tri-Chennai); and (ii) Royal Embroideries Pvt Ltd vs Commissioner 2008 (84) RLT 84 (CESTAT-Ban). In the first case, the assessee had imported Mulberry raw silk and Dupion silk under an advance licence and cleared the goods duty-free under Notification No. 80/95-Cus after executing a bond as required by the assessing authority. The assessee, however, failed to discharge export obligation in relation to the imported raw materials, thereby committing breach of one of the conditions of the said notification. At the instance of the department, they paid duty on the imported goods with interest @ 24% p.a. from the date of clearance of the goods. Subsequently, the department issued a show-cause notice to confiscate the goods under Section 111 (o) of the Customs Act and to impose a penalty on t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....separate penalties on them. 13. According to the learned SDR, encashment of the bank guarantee cannot be equated to voluntary payment of duty by the assessee. Therefore, the decisions cited by the learned counsel are not applicable. In any case, it is not in dispute that the substantive condition of Notification No. 80/95-Cus was violated by the appellant who failed to discharge export obligation in relation to the raw materials imported duty-free under the DEEC Scheme thereby violating condition (v) of the Notification. It is argued that such breach of a condition of the exemption notification would ipso facto render the goods liable to confiscation under Section 111 (o) of the Act and consequently the importer would be liable to penalty under Section 112 of the Act. In this connection, the learned SDR relies on Order No. A-170-171/10/CSTB/CII dated 08.06.10 passed by this Bench in Appeal No. C/1393-1394/02 Mum (Munilal Mehra vs Commissioner of Customs (Adjudication), New Delhi). It is, incidentally, pointed out that this Mr. Munilal Mehra is the father of the appellant Mr. Bimal Kumar Mehra. In the cited case, Mr. Munilal Mehra was found to have associated h....
X X X X Extracts X X X X
X X X X Extracts X X X X
....er the said section. We have no reason to disagree. 'Importer' as defined under Section 2 (26) of the Customs Act includes any owner or any person holding himself out to be the importer. In the present case, the appellant, by filing the Bills of Entry, held himself out to be the importer of the goods and, therefore, he is the importer for purposes of Section 28 of the Customs Act. Where the taxable event is 'import', the tax has to be paid by the importer. Therefore, the importer is the person chargeable with the duty on the goods imported and presented under the Bill of Entry. Accordingly, we hold that the liability to pay duty, in the present case, is on the appellant. 15. It is not in dispute that the bank guarantee was encashed by the department way back in 1997. There is nothing on record to show that it was encashed at the instance of the appellant. As rightly submitted by the learned SDR, the encashment of bank guarantee cannot be deemed to be a voluntary payment of duty by the appellant. Therefore, the appellant cannot claim immunity from penalty or fine on the alleged ground of payment of duty prior to issuance of show-cause notices. In th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....iscation. This part of the Commissioner's order was not challenged by the Revenue. In the Chennai case, on the other hand, the learned Commissioner imposed a redemption fine under Section 125 of the Act in lieu of confiscation of the goods, quite justifiably, on the facts of the case. This part of the Commissioner's order in the Chennai case is under challenge by the appellant and this challenge cannot succeed in view of the decision in Weston Components (supra). The learned counsel has argued that the bond executed by the assessee in the case of Weston Components (supra) was a different kind of bond and, therefore, that decision cannot be made applicable to the instant case. The counsel has not produced a copy of the bond to establish the point. However, he has fairly admitted that the bond was executed under Notification No. 80/95-Cus whereunder the appellant cleared the goods duty-free. 18. As we have already indicated, in the Mumbai case, no redemption fine was imposed by the Commissioner, but the Revenue is not aggrieved. The learned SDR has not been able to offer a satisfactory explanation, nor has he showed a copy of the bond executed by the appellant t....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... on Mr. Bimal Kumar Mehra is not liable to be vacated though it calls for reduction, in the circumstances of the case, to Rs 10,000/- (Rupees Ten thousand only). It is ordered accordingly. 22. Needless to say that the penalty imposed on 'M/s Global Art' under Section 114A of the Act is liable to be set aside. It is ordered accordingly. 23. The demand of interest on duty under Section 28 AB of the Customs Act in the Mumbai and Chennai cases is liable to be set aside and it is ordered accordingly for the reason that this provision of law was not in force at the material time. In the Chennai case, the learned Commissioner confirmed demand of interest of Rs 2,57,716/- against the appellant and ordered it to be adjusted against the amount encashed from bank guarantee. Though, in the operative part of the Commissioner's order there is no mention of the legal provision covering the demand of interest, the body of his order indicates that this demand is in terms of Notification No. 80/95-Cus (as amended) and Section 28AB of the Customs Act. Though Section 28AB of the Customs Act is not applicable, the Exemption Notification is certainly invocable for l....