TaxTMI 
TaxTMI 
2008 (1) TMI 349
X X X X Extracts X X X X
X X X X Extracts X X X X
....112(a) of the Customs Act, 1962 by the above order. 2.1 Ld. Adjudicating Authority in Para 52 of the Order of Adjudication, held that out of materials imported duty free by the EOU first Appellant, in terms of Notification 53/97-Cus. dated 3-6-1997, no final product was available in the factory of the said EOU and appropriate documentary evidence for supply of the goods covered by Bill Nos. AJ/EOU/01/01-02 and AJ/EOU/07/01-02 to AJ/EOU/15/01-02 were not produced before the Department. This led to the Department to infer that supply of goods were not made to M/s. B.H. International Pvt. Ltd and claim of the first Appellant that there was fulfillment of import obligation was denied. While arriving at such decision, the Authority below concluded that the goods were diverted in the Domestic Tariff Area (DTA) of India in violation of directions of the aforesaid Notification which rendered the goods value of Rs. 1,59,42,480 liable to confiscation and duty of Rs. 1,02,49,821/- was imposable along with interest as well as penalty. In Para 53 of the impugned order, it was held that the difference in the value of the goods liable to confiscation was due to the fact that two Invoices Nos. AJ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e in five consignments to M/s. B.H. International Pvt. Ltd., FEPZ (now FSEZ), by Deemed Export. In respect of the remaining quantities of imported Raw Materials, i.e. 66.995 MT of Zinc Ingots, 20.000 MT of Nickel Cathods, 24.1245 MT of Tin Ingots and 79.731 MT of Copper Rods, the said EOU did not fulfilled the stipulated export obligation, in violation of the condition laid down in Section 71 and Section 59 of the Customs Act, 1962 and in the Notification No. 53/97-Cus., dated 3-6-1997, as amended. (iii) Shri Atish Agarwal, Director of the said EOU with the assistance of one Shri Dipesh Goswami and as per decision of the Board of Director of the Appellant EOU arranged fake and forged proof of exports in respect of the consignments. (vi) of Para 27 of impugned order, to manipulate the fraud and to do the above fraud, the Appellant EOU also forged signatures of two CHAs and prepared fake transport documents. They also failed to prove satisfactorily that the goods shown to have been sold by the said EOU to M/s. B H. International Pvt. Ltd., FEPZ (now FSEZ), (as mentioned at Sl. No. 1, 7 to 15 of Table-I of Annexure - D) by Deemed Export, have actually entered the unit of M/s. B.H. I....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rar of Company which were public document and amounted to admission, (5) Acknowledgement Slip of receipt of the goods by SEZ Unit of each of the invoices. Therefore, such vital evidence should be considered without ignoring the same. (iii) DRI did not disclose in the show-cause notice of the evidence recovered from M/s. B.H. International Pvt. Ltd., a SEZ Unit, and did not bring the same to the notice of the first Appellant to allow an opportunity of defence. The demand assessed by the DRI against the above SEZ Unit was admitted by them and whether the basis of assessment was proper was not disclosed to the first Appellant which requires to be confronted when an unilateral decision was taken in that case and that has affected the Appellant. This process by the DRI has biased the ld. Adjudicating Authority who was ousted to exercise jurisdiction independently, fairly as well as justly. Investigation by DRI was fully biased and SEZ Unit was not called upon to explain in respect of bigger discrepancies of 6041.3 kgs. of goods. (iv) Annual Report of the above SEZ Unit which was a Public document was available in the records of the Registrar of Companies exhibiting disputed bills and ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... demands and the claims of natural justice cannot be treated with scant regard. The circumstances of that case demonstrated that there was a clear violation of natural justice. 5. Ld. SDR, Shri J.K. Jha, appearing for the Revenue, submitted that the allegation made in the show-cause notice was well tested following principles of natural justice. Investigation was done by DRI appropriately which also met tests by the ld. Adjudicating Authority by an elaborate and reasoned order. Baseless plea of the Appellants that there was denial of natural justice is not at all entertainable after long time. 6. Having heard the matter extensively from both sides, although stay matters were fixed for hearing, it was considered necessary to dispose of all the appeals dispensing pre-deposit for the cry of the Appellant that violation of natural justice is incurable at the Appellate stage and the Appellants were deprived of the process of justice in view of gravity of the matter involved. Therefore, we dispensed pre-deposit and dispose the appeals by this common order for the common cause giving rise to the impugned order. 7.1 The crux of the issue relates to assertions and denial of certain vital....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... genuine or misconceived and whether is false or truthful, cannot be tested before the defence is raised. We also noticed that the demand is huge and the Appellant may get an opportunity to defend its case. Without expressing any opinion on the merits of the case, we feel it proper to send the matter back to the learned Adjudicating Authority. In all fairness, granting an opportunity to the aggrieved to represent his case, he gets right to defence and that shall serve useful purpose of law following cardinal principles of natural justice. To say so, we follow the ratio laid down by the Hon'ble High Court of Madhya Pradesh in the case of Methodex Systems Limited v. Union of India - 2001 (127) E.L.T. 44 (M.P.). 7.5 The present case in hand subscribes to the ratio laid down by the Hon'ble High Court of Delhi in the case of Sitaram Agarwal (supra). SEZ Unit i.e. M/s. B.H. International Pvt. Ltd. is required to produce evidence for cross verification of the first Appellant as well as the ld. Adjudicating Authority to settle the disputed issues. That Unit cannot be absolved from producing relevant evidence required for a fair adjudication in the matter of the first Appellant when transa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the case of Tarak Nath Gayen and Others v. Customs, Excise & Gold (Control) Appellate Tribunal and Others - 1987 (31) E.L.T. 631 (Cal.). The Hon'ble High Court held in Paras 14 to 17 of the judgment as under : "14. I am of the view that the order of penalty was imposed under Section 55 with a view to punish Debendra Nath Gayen. Section 74 creates a liability to penalty for any act or omission of a person in relation to any gold which would render such gold liable to confiscation. The liability is for penalty not exceeding five times the value of the gold or Rs. 1,000/- whichever is more whether or not such gold has been confiscated or is available for confiscation. 15. Now that Debendra Nath Gayen is dead, there cannot be any question of realizing the amount of penalty from the legal representatives of Debendra Nath Gayen. That will amount to punishing the legal representatives. This is not a case where a debt has come into existence as a result of the order imposing penalty. The object of imposing penalty was penalize Debendra Nath Gayen. That object will not be achieved by realizing the amount of penalty from the assets left behind by Debendra Nath Gayen. 16. My attention was ....