TaxTMI 
TaxTMI 
2017 (7) TMI 669
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.... EOU, was alleged to have contravened the provisions of Notification No.1/95-C.E. dated 4.1.95, Exim Policy 2002-2007, Rule 11 and Rule 17 of Central Excise (No.2), Rule 2001, inasmuch as, they had procured huge quantity of raw materials, namely, polyester fabrics yarn from some of the 100% EOUs under CT-3 certificate, but instead of utilising the same in the manufacture of goods and exporting the same, they exported cheaper varieties of polyester fabrics yarn from local market, and the raw materials procured duty free were diverted into the Domestic Market. Consequently, show cause notice was issued to them proposing confiscation of the goods and penalty under the Customs Act, 1962 to the Appellant and other noticees. On adjudication, the ....
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....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 disputed by the respondent-Unit. It is an admitted position that the respondent being a 100% EOU, diverted the goods illicitly into the open market and the raw materials which were procured by forgoing the Customs duty were not used for the purpose for which they were imported. From the material on record, it appears that when the respondent-Unit imported the goods and was permitted to ware house the goods in the private bonded warehouse without payment of the duty, the respondent-Unit furnished the Bond ....
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....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 Director General of Foreign Trade, pay duty of Excise leviable on such articles under Section 3 of the Central Excise Act, 1944 and duty of Customs & Central Excise leviable on the raw materials/ components parts used in the manufacture of such articles as are not allowed to be sold in India in accordance with the provision of Exim policy. 13. We, the obligors, shall comply with the conditions and limitations stipulated in the said Import and Export Policy as amended from time to time or the ....
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....ods, 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 market and the raw materials which were procured by forgoing the Customs duty were not used for the purpose for which they were imported, the Customs authorities were authorized to confiscate such goods which are illicitly diverted. It is required to be noted that the respondent- Unit was permitted to deposit the goods in a bonded warehouse without making payment of the Customs duty, on certain terms and conditions and one of the condition was that the finished product was required to be exported, meaning thereby the goods w....
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....ecuted. 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 redemption fine in lieu of confiscation is concerned, considering the language used in Section 125 of the Customs Act, we do not agree with the same. As observed hereinabove, Section 125 of the Act shall be applicable in a case where confiscation of any goods is authorized by the Customs Act. If it is found that there is breach of any of the provisions of the Customs Act and/or even the Export/Import Policy, and/or there is a breach of any of the terms and conditions on which goods were permitted to be imported without payment of duty and pe....