2017 (4) TMI 219

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....stated the facts of the case are that M/s Sanjari Twisters, an 100% EOU, engaged in the manufacture of Polyester Textured Yarn. Acting on an intelligence, the DRI Officers initiated investigation against the said unit, which later culminated into issuance of show cause notice alleging diversion of duty free goods in the domestic market without payment of excise duty, and reflected such clearances against fake Advance Licence/Advance Release Order, on paper only, so as to fulfil their export obligation. On Adjudication the demand of customs duty and penalty imposed on M/s Sanjari Twisters and personal penalty against other co-noticees. 4. However, the Ld Commissioner has not directed confiscation and consequently redemption fine on the go....

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....e to be used in the manufacture of finished goods for export, but the Appellant 100% EOU diverted in the Domestic Tariff Area, is liable for confiscation and imposition of fine. This issue is no more resintegra as has been considered by the Hon'ble High Court of Gujarat in the case of CCE&C vs Kaay Bee Tax Spin Ltd (Supra). Their Lordships observed as follows: "5. Heard learned advocates appearing on behalf of the respective parties at length. At the outset, it is required to be noted and it is not in dispute that as such, the Adjudicating Authority has confirmed the demand of Central Excise and Customs duty, etc. on the raw materials, interest thereon and imposed penalties under various sections of the Act, which has not been disp....

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....emandable on the goods obtained by us without payment of duty from the domestic tariff area and transported from the place or procurement to our premises for use in special Industrial purpose and shall also pay after final assessment by the proper officer/Assistant Commissioner of Central Excise or such other delegated authority,as the case may be which were assessed on provisional basis under Rule 9B of the Central Excise Rules, 1944 all dues within 10 days of the date of demand thereof being made in writing by such officers. 12. We, the obligor, shall if the articles so manufactured are and are allowed to be sold in India in such quality and subject to such other limitation and conditions as may be specified in this behalf by the....

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....aw materials which were procured by forgoing Customs duty have not been used for the purpose for which they were imported, and therefore, the goods were liable to be confiscated. 5.3 Section 125 of the Customs Act, 1962 provides that whenever confiscation of any goods is authorized by the Act, the Officer adjudging it may, in the case of any goods, the importation or exportation whereof is prohibited under the Customs Act or under any other law for the time being in force, and shall, in the case of any other goods, give to the owner of the goods, an option to pay in lieu of confiscation such fine, as the said Officer thinks fit. 5.4 As observed hereinabove, on the respondent-Unit diverting the goods illicitly into the open....

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....which were permitted to be warehoused on certain terms and conditions; including without making payment of Customs duty. 5.6 Now, so far as reliance placed upon a decision of Bombay High Court rendered in case of Finesse Creation Inc. [Supra] and the subsequent decision of the said High Court in the case of National Leather Cloth Mfg. Company [Supra] are concerned, on facts, the same shall not be applicable to the facts of the case on hand, since in the matters before the Bombay High Court, there was no bond/legal undertaking executed. The submission made on behalf of the respondent-Unit that unless and until the goods are first seized, there is no question of confiscation and consequently, there is no question of imposing the rede....