TaxTMI 
TaxTMI 
2017 (11) TMI 1119
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.... given permission for trading in readymade garments and accessories for garment industries such as buttons, tapes, labels, chatons, needles and consumables. On 15.12.2012, intelligence was received that goods imported duty free by M/s. Global Partners (India), SF-1-10B, NSEZ, Noida, have been clandestinely removed from the NSEZ without any valid and proper documents. Consequently, checking and stock taking of the goods imported was ordered to be conducted in the unit in order to ascertain the factual position. During the course of the checking as well as physical verification of stock, it was found that some goods were lying packed in cartons and plastic bags Shri Jatin Arora, Partner of M/s. Global Partners (India), Noida, declared that the said goods were Chatons which had been imported without payment of duty for trading and had been packed for export. The cartons appeared to be fresh and without any marks and numbers. Thereafter, the cartons were opened and the goods were subjected to examination. On being opened, the cartons were found to contain "old and rejected glass beads and glass pieces." However, no quantity of Chatons which were imported by the unit and as declared by ....
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....India), Noida on the total quantum of imported goods which were procured without payment of duty and which were found diverted into DTA clandestinely. 5. In addition to imposition of penalty on M/s. Global Partners (India), Noida and others, penalties were also imposed on Sh. Jatin Arora, Partner of M/s. Global Partners (India), Noida under section114 (a) as well as 114(AA). 6. The present appeal is filed by Sh. Jatin Arora, challenging the penalties imposed on him. 7. With the above background we heard Shri A.K. Prasad & Ms. Surabhi Sinha, Advocate for the appellant as well as Shri Govind Dixit, DR for the respondent. 8. Shri A.K. Prasad, Advocate arguing the case of the appellant submitted as follows: i) The proceedings against the appellant have been conducted by the Customs Authorities without jurisdiction. SEZ units are deemed to be territory outside customs territory of India and the Commissioner of Customs had no jurisdiction to confiscate the goods and impose penalty in respect of a unit which is situated in SEZ area. He referred to section 3(1) of the SEZ Act 2005 and argued that powers to Customs Authorities were extended only vide the SEZ Rules (Amendment)....
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.... diversion. 12. At the outset we propose to discuss the argument advanced on the ground of jurisdiction. It has been argued on behalf of the appellant that M/s. Global Partners (India), Noida is a unit situated in Noida, SEZ and that Customs officers have no jurisdiction to investigate or adjudge any offence taking place in SEZ area. Such powers rest only with the Development Commissioner. Such powers have been conferred on customs Officers w.e.f 5.8.2016 vide notification amending the SEZ Rules 2005. The ld. counsel has further cited the case laws by the Tribunal in which it has been held that in the absence of any enabling provision in the SEZ act, the provisions of Customs Act 1962 will not be applicable to a unit situated in that region. Section 53 of the SEZ Rules makes it clear that SEZ is deemed to be a territory outside the customs territory of India. 13. We have perused the above decision in which the Tribunal has observed that the Customs Authorities had no jurisdiction to confiscate goods and impose penalty and interest on a SEZ unit. However, we note that the Hon'ble High Court of Gujarat has taken the Contra view in the case of Union of India Vs Oswal Agricomm Pv....
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....ision appears to have been delivered without considering the above decision. To this extent the Tribunal decisions may have to be considered as per in curium. 15. By respectfully following the decision of the Hon'ble Gujarat High Court, we decide that Customs Authorities had the jurisdiction to adjudicate cases originating within a SEZ even for the period prior to the amendment in the SEZ Rules. To this extent the impugned order cannot be held to be passed without jurisdiction. 16. Next to be considered is the argument that no penalty can be imposed on Sh. Jatin Arora, partner in as much as penalty has already been imposed on the a SEZ unit. we have carefully considered the decision of Hon'ble Bombay High Court in the case of the Amritlakshmi Machine Works (Supra). The Hon'ble High Court observed as follows: "31. We make it clear that although the Division Bench of this Court in Textoplast Industries (supra) has held on first principles that Section 140 of the Act is to be read into all cases falling under Section 112(a) of the Act, we do not agree. Section 140 of the Act on first principles has to be read into only in cases where the notice to impose penalty under Section....
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....the course of physical verification conducted in the unit and recorded under panchnama dated 15.12.2012 in respect of both chatons and machine sewing needles. He also confessed categorically that the goods found in the cartons were old and rejected glass beads / pieces which had been purchased from the domestic market and were not the ones which had been imported against bills of entry filed with NSEZ customs. He again reiterated the said submissions and the admissions in his statement dated 15.04.2013. However, subsequently he has tried to mislead the investigations by stating that the goods were low quality chatons imported against BOE nos. 8468 dated 05.12.2012, 8696 dated 14.12.2012 and 7723 dated 07.11.2012. The contention of Shri Jatin Arora, does not appear to be tenable and is an afterthought aimed at covering up the misdeeds in view of the fact that the old and used glass beads were found in plain cartons without any marks and numbers and thus they can in no way be identified and related with the said BOEs." 19. Further it is seen that Sh. Jatin Arora tried to cover up the shortage which has arisen by clandestine clearance of 7166 kgs of machine sewing needles by bringi....