TaxTMI 
TaxTMI 
2020 (7) TMI 654
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....3/- on gold found short was confirmed. Further, penalty of Rs. 3,68,491/- was confirmed under Section 114 A of the Customs Act and further, penalty on the appellant - Chetain Mayach amounting to Rs. 70,000/- under Section 112(b) of the Customs Act, 1962 was confirmed and further upheld the confiscation of the Santro Car bearing registration no. RJ 19 CA 6174 with option to redeem on payment of redemption fine. 2. The brief facts are that on 3.8.2016 at 6.45 p.m. during the checking by the security staff posted at the gate of SEZ, Zone-II, Sitapura Jaipur, a vehicle No.RJ 19 CA 6174 being driven by Shri Chetan Mayach S/o Girdhari Lal Mayach (Appellant) Production in Charge of M/s. Tarkesh Art Jewellery, was trying to exit from the gate without checking. The Security Guards ran after the vehicle and managed to stop the vehicle. The said car bearing no. RJ 19 CA 6174 was thoroughly searched. Three gunny bags were found lying in the dicky (Boot Space) of the said car containing silver grains packed in four metal boxes. The weight of the silver grains was carried out and the net quantity of 78.780 kgs. was found. The purity test of silver grain was carried out and the purity of silver ....
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.... same before the Customs officer on duty at the SEZ Customs gate office, and having no valid/legal documents required for such clearance. (C) During stock taking and physical verification of stock in the factory premise on 4.8.2016, stock of silver was found short which shows that Tarkesh Art Jewellery has been engaged in clandestine removal of goods in past also. Shri Navrattan Johari accepted the shortage of the stock in his statement dated 5.8.2016. Also, at the time of stock taking, Shri Navrattan Johari did not produce Raw Material Stock Register, Casting Process Register, Filling Process Register, Setting Process Register, Stock Register, Stock 22 cts. Mouting (Casting) Register, Polished Process Register and Finished Goods Register, and produced these registers on 10.08.2016. It appeared that M/s. Tarkesh Art Jewellery was not maintaining the stock register on day to day basis in contravention of the provisions of Rule 34 of the SEZ Rules, 2006 read with Rule 22(2) of the SEZ Rules, 2006, and was indulging in the clandestine removal of the goods from the SEZ without documentation and without discharging the duty liability on such removals. (D) Shri Navattan Johari accepted....
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....goods being gold bars of 3 kg., Alloy for gold 12 kgs., copy of which has been annexed in the appeal paper book. As the raw materials being gold and silver properly imported and also recorded in the books of Account, it is impossible for the appellant to remove finished goods and inputs clandestinely. For any shortage or failure to account for the inputs, the appellant is liable for recovery of duty and other penal action in accordance with the Special Economic Zones Act, 2005, which has provisions for adequate safeguards. (E) It is further urged that the Production Manager, Shri Chetan Mayach has approached the SEZ gate and had requested for permission to take the goods out for job work, for making of semi-finished jewellery in view of the urgent orders in hand. Admittedly, there was no concealment of the silver grain in any cavity of the car, and rather, the same was kept in the boot of the car and visible. There is no illegality in the movement of the goods within the SEZ. At the time of so called interception, the car was still within the SEZ area. In support of their contentions, the appellant had requested for cross-examination of the Panch Witnesses, the seizing officer, g....
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....ly after inspection, that the same is lying in the form of dust - slurry in the tank and the same is only periodically recovered. This fact was urged by Mr. Navrattan Johari, Proprietor in his statement recorded under Section 108 on 10.08.2016. Mr. Johari had categorically stated that some gold particles get stuck in the hands of the karigar and they washed their hands in the water tank especially kept for the purposes. This tank is refined once in 2-3 years and the gold is recovered. Thus, when they did periodical refining of the tank, apparent shortage of 464.577 is recovered and the difference /shortage reconciled. Accordingly, ld. Counsel prays for allowing their appeals with consequential benefits. 9. Ld. Authorised Representative for the Department has relied upon the impugned order. 10. Having considered the rival contentions and after perusal of the records, we find that prior to 9.8.2016 when vide notification no.GO 2665 (E) in the Gazette, the Government in exercise of the powers under sub-section (1) of Section 21 of the SEZ Act, notified the offences contained in Sections 111, 113 and 115 etc of the Customs Act, 1962, as offence under the SEZ Act. Thus, prior to 9.8.2....
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.... absent in the Special Economic Zones Act, 2005. Section 53(2) is intended to operate in a different context and not for empowering officers of customs, it is to be read with the Special Economic Zones Rules, 2006 that permits direct shipment of inputs from abroad to the zone and this deeming status enables issue of bills of lading for delivery at zones without the intermediate delivery through customs formations. The definition of 'specified officer' exists only in the Special Economic Zones Rules, 2006 and is intended to provide the qualification of the official discharging the functions of that office. Under the Special Economic Zones Rules, 2005 all officers appointed for implementation of the Act function under the Development Commissioner and the original authority, not being so, is not empowered to initiate proceedings under the Special Economic Zones Rules, 2005. 12. Notwithstanding the above conclusions on the jurisdictional competence of the original authority, it is also seen that the proceedings have invoked Section 111 and Section 112 of Customs Act, 1962. Jurisdiction is not merely territorial but also has to be in the context of the scope of the statute which is so....