2016 (11) TMI 6

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....arehouse license and procured imported as well as indigenous duty-free goods for purposes of use in development of software for export. Customs Authorities carried out investigations against the respondent, during which it was found that the respondents had leased-out their premises containing the bonded duty-free goods   both imported as well as indigenous. While leasing out, the respondents had transferred the duty-free goods on Inter Unit Transfer (IUT) basis for use by the lessee STP unit. The Customs Authorities took the view that respondents had contravened the provisions of Notifications No.52/2003-Cus. as well as Notification No.22/2003-CE dated 31.3.2003 inasmuch as the arrangement of transferring duty-free goods on IUT b....

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.... duty-free bonded goods have been transferred to other STP units on IUT basis which is permissible under the provisions of Foreign Trade Policy as well as the relevant Notifications. Consequent upon the transfer of capital goods to another EOU, the second EOU will assume the export obligation and there is no revenue loss to the Government. (ii) They have also pleaded that there was no ground to order confiscation of the goods or to impose penalty on the respondent since the sharing of duty-free equipment like DG sets, pollution control equipment, etc., with other STP units is without actual displacement of such goods and hence is only a venial breach. Accordingly, they have prayed for setting aside the impugned order itself. 4. Heard Shr....

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....milar provision. Both these Notifications permit this, subject to the approval of Commissioner of Customs/Central Excise. In the impugned order, the learned Commissioner has recorded the finding that the leasing of the STP premises along with the equipments procured duty-free to other STP unit has been done without obtaining any permission of the proper authorities. On account of this violation of the conditions of duty free equipments of goods, he has held that the goods become liable for confiscation under Section 111(o) of the Customs Act, 1962 and consequently, the respondent also becomes liable for imposition of redemption fine and penalty under Section 112(a) of the Customs Act, 1962. We are in agreement with the findings of the Commi....