TaxTMI 
TaxTMI 
2016 (3) TMI 701
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....t found acceptable in terms of condition No.3 of Notification No.137/2000-Cus dated 19/10/2000, which require the respondents to maintain proper accounts in the format convenient to them, financial year wise, in respect of stock, among other things. It was argued that the respondent had claimed a manufacturing loss of 9% during its export and any loss in excess of said percentage should have been reported to the Customs department. As a result of demands, a show-cause notice was issued to the respondents seeking to recover a duty of Rs. 9,70,039/- on the said platinum. It was also alleged that the said platinum was liable to confiscation under Section 110 (o) of Customs Act, 1962. It was also alleged that the respondent had violated the provisions of Chapter 9A of the (Export-Import) EXIM Policy as well as the Handbook of Procedures, 1997-2002 prescribed in para 9A.5 to the effect that the wastage/manufacturing loss of platinum in the manufacture of jewellery shall be within overall percentage prescribed in Appendix-41 of Handbook of Procedures. The Handbook of Procedures vide Serial No.111 has prescribed 9% wastage of platinum in the manufacture of studded jewellery. Since the sho....
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....on fine in lieu of confiscation under Section 125 of the Customs Act. It was argued that since the goods were released on the strength of a bond, a redemption fine is imposable even if the goods were physically not available for confiscation. Revenue relied on the decision of the Honble Supreme Court in the case of Weston Components - 2000 (115) ELT 278 (SC). 3. The learned Counsel for the respondent argued that no penalty can imposed. The respondent also filed a cross objection against the said appeal by the Revenue. The learned Counsel argued that the shortage in platinum was due to process loss and since the shortage was a process loss, the entire platinum was accounted for in their records. It was argued that the production of platinum jewellery is minuscule 3% of the total turnover and they dont have any special machinery required for processing platinum jewelry. He argued that they were using the machinery, which is used for processing gold jewelry, for manufacture of platinum jewelry. It was also argued that a limit of 9% wastage does not cover intangible manufacturing loss. It was argued that they had maintained the records properly and they submitted that they were no....
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....f show cause notice when the investigation was going on. It was argued that imposition of penalty on the discretion of the adjudicating authority based on the facts and circumstances of the matter. Section 114A does not prescribe the mandatory penalty of equal amount of the duty but the maximum limit for imposition of penalty. 4. We have gone through the rival arguments. 5. We find that there was no evidence of any clandestine removal of platinum. In the initial stages, the respondent had hinted some thefts however there was no further investigation on that line. The shortages of platinum are either on account of process loss or pilferages. Notification No.137/2000-Cus allow the import of these goods subject to execution of bond in the form specified by the Assistant Commissioner or Deputy Commissioner binding himself among other things to dispose of the imported goods, the article produced manufacturing process and packed in the said unit or the waste, scraps and remnants arising out of such production, manufacturing, processing or packaging in the manner as provided in the EXIM policy and in the said notification. The said notification also requires them to maintain records....
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....period of five years to pay an amount equal to the duty leviable on the said unutilized goods along with interest @ 25% on the said duty from the duty of importation till payment of such duty. Revenue has relied on the decision of the Honble Supreme Court in the case of Weston Components Ltd., Vs. CC, New Delhi - 2000 (115) ELT 278 (SC) (supra). In the said decision, following has been observed: "It is contended by the learned Counsel for the appellant that redemption fine could not be imposed because the goods were no longer in the custody of the respondent-authority. It is an admitted fact that the goods were released to the appellant on an application made by it and on the appellant executing a bond. Under these circumstances if subsequently it is found that the import was not valid or that there was any other irregularity which would entitle the customs authorities to confiscate the said goods, then the mere fact that the goods were released on the bond being executed, would not take away the power of the customs authorities to levy redemption fine. 2 The appeal is dismissed." It is apparent from the decision of Hon'ble Supreme Court that if the goods are ....
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....ner. I find that in similar circumstances the Tribunal has observed as follows i) KAY BEE TAX SPIN LTD. 2014 (305) E.L.T. 132 The Revenue is in appeal only for reason that the Adjudicating Authority has not ordered for confiscation of the raw materials despite there being a bond executed by the assessee. We find that the main plank of the Revenue's appeal is that the commissioner has erred in refraining from formally confiscating and imposing redemption fine on of goods. In our view, the revenue appeal is on diversion of imports and inasmuch as when the goods are not there for confiscation, the question of confiscation cannot arise. Reliance placed by the revenue on the judgment of the Supreme Court in the case of Western Components [2000 (115) E.L.T. 278 (S.C.)] is also misplaced in the facts of the case in hand. Adjudicating Authority has himself held that the respondents' assessee is liable to pay Central Excise Duty on the goods manufactured out of the raw materials imported on which the revenue has foregone the Customs duty. ii) GUNJAN EXPORTS 2013 (295) E.L.T. 733 5. I have considered the submissions and I find myself unable to appreciate the submissio....