TaxTMI 
TaxTMI 
2023 (12) TMI 756
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....ring unit in the NOIDA export processing zone EPZ which zone has subsequently been converted into NOIDA Special Economic Zone NSEZ. It imports gold duty free and manufactures and exports gold jewellery. Goods manufactured in the EPZ should only be exported. If they are removed and sold within India (known as Domestic Tariff Area DTA), Central Excise Duty equivalent to the Customs duties leviable on such goods if they are imported is leviable. This legal position is not in dispute. 3. The Central Excise officers caught some goods being clandestinely removed in a car from the assessee's factory and they seized them. In follow up investigations, the appellant's factory premises were searched and two notebooks and some private records were found which had entries of diamonds which it received from its sister unit M/s. Maharshi Ayurvedic Private Ltd. MAPL . After completing the investigations, two Show Cause Notices SCN dated 03.4.2003 and 24.11.2004 were issued to the appellant and three others. The first SCN proposed confiscation of the goods which were seized and the car in which they were being carried. The second SCN proposed demand of duty on the goods allegedly manufactured an....
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.... duty of customs (SAD), etc. and hence the excise duty on goods removed from a unit in EPZ to DTA should be calculated accordingly. The basic customs duty is to be calculated as per the Customs Tariff read with any Customs exemption notifications. The Additional duty of Customs must be calculated on the value of the goods + basic Customs duty at the rates as per the Central Excise Tariff read with any Central Excise exemption notifications. 10. According to the appellants, the assessee was entitled to the benefit of exemption notification no. 6/2002-CE dated 1.3.2002 (S.No. 171) and it was wrongly denied to the appellant in the impugned order. The relevant portion of the impugned order is as follows: "5.4. I would like to take up the first issue of CVD and SAD on the impugned goods i.e., studded diamond jewellery, cut &polished diamond and precious and semi-precious stone. In this context, the party argued that the CVD @ 16% cannot be demanded as the jewellery items were exempted unconditionally from payment of Central Excise Duty vide notification no. 6/2000 dated 1.3.2000, notification no. 3/2001 dated 1.3. 2001 and notification no. 6/2002 dated 1.3.2002............. ....
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.... of ornaments; (ii) .... (iii) "articles" in relation to gold shall mean anything (other than ornaments), in a finished form, made or manufactured from or containing gold and includes any gold coin and broken pieces of an article of gold but does not include primary gold, that is, to say, gold in any unfinished or semi-finished form including ingots, bars, blocks, slabs, billets, shots, pellets, rods, sheets, foils and wires. Nil 12. Learned authorised representative for the Revenue submitted that the benefit of serial No. 171 of notification no. 6/2002-CE dated 1.3.2002 is available to goods which match the description against this entry "articles of gold/silver etc. or ornaments or strip wire of gold, etc." The definition of "ornament" and "article" are given in the notification. The impugned goods "studded jewellery, diamonds, semi-precious stones, etc." do not fall in the description of goods given in the Notification. Hence the benefit of this Notification for CVD cannot be extended to the appellant in respect of the goods clandestinely removed. He also submitted that any exemption notification must be interpreted s....
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....es, for instance, cannot be called jewellery because although they are meant for decoration, they are not worn by people. Even plants which are used only for decoration and have no utility otherwise are referred to as 'ornamental plants'. Since the word 'ornament' has a very wide meaning, it has been specifically defined for the purpose of the notification to mean a thing, in any finished form, meant for personal adornments or for the adornment of any idol, deity or any other object of religious worship, made of, or manufactured from, gold, or silver or platinum or any one or more of them, whether or not set with stones or gems (real or artificial) or with pearls (real, cultured or intimation), or with all or any of them an includes parts, pendants or broken pieces of ornaments'. This definition includes anything in finished form meant for personal adornments which, in essence is jewellery. It also includes, in addition, other things such as those meant for adornment of idols, etc. Thus, the exemption clearly covers jewellery within its ambit. Further, the exemption under this notification at S.No. 171 includes 'Ornaments and the like articles' and thus, not only ornaments but also....
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....ed 08.01.2004 claimed by the appellant was not even issued even on the last date of removal of goods, viz., 4.10.2002. Therefore, the benefit of this exemption notification was not available to the appellant. 20. We have considered the submissions by both sides on this issue. 21. We find that the appellant cannot claim the benefit of a notification applying Section 9A(5) of the Central Excise Rules, 1944 which was not even in existence at the time of the SCN and had already been superseded in 2001 and further in 2002. The appellant claimed that the date of removal was not known in the case and therefore, the benefit of the exemption notification available on the date of the SCN should be extended to it. While it is true that the exact date of removal of goods was not known, they are alleged to have been removed from 7.9.2000 and 4.10.2002. Undisputedly, the exemption notification no. 6/2004-Cus was not available during this entire period. Therefore, the appellant is not entitled to the benefit of the exemption notification not available during any of the dates of the clearance. 22. We, therefore, find in favour of the Revenue and against the appellant and hold that the ben....
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....ries to the extent of 501.407 carats and that they were returned by the appellant to the sender. It is only with respect to this claim that the matter was remanded by the CESTAT in the first round of litigation to the Commissioner and in the de-novo proceedings, he did not find in favour of the appellant with respect to this claim. Otherwise, the demand was already upheld by this Tribunal in the first round of litigation and there is no appeal against the Final Order in the first round of litigation. 26. We have considered the submissions on this aspect. 27. We do find that in the first round of litigation, this Tribunal remanded the matter for the limited purpose of deciding the claims with respect to CVD, SAD and the entries in the WIP register. We also find that it is true that the demand in this case was not based only on the WIP register but this register was used as supporting evidence only. The demand was based on the entries in the two notebooks Priya and Rishu and the some other entries and there was no separate demand on the basis of the WIP register. WIP register was only used as supporting evidence. The claim of the appellant with respect to some entries (known as....
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....adjudicating authority in the de novo proceedings were not considered and no finding has been given on them and therefore, there was violation of principles of natural justice and for this reason, the penalty imposed on him may be set aside. " Regarding imposition of penalty on Shri Anand Shrivastava, it is submitted that Shri Anand Shrivastava (notice no. 2) is not involved in day to day activities as the work of import/export clearances was being looked after by professionally qualified persons. The ground on which penalty has been proposed in the SCN in para 30 (iii) is that Shri Anand Shrivastava, Director of the unit who was responsible for overall supervision and control of the unit and its activities failed to discharge its duties in terms of conditions of Notification applicable in the zone. Ther is no evidence whatsoever on record identifying the exact positive acts of omission and commission on the part of Noticee no. 2 listed in Rule 26 of the CER, 2002 which have rendered imported goods liable to confiscation u/s 111 of the Customs Act, 1962 warranting imposition of penalty u/s 112 of the Customs Act, 1962. Similarly, there is no evidence on record to suggest t....
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....osed under Rule 26 of the Central Excise Rules. Therefore, the contention of Shri Shrivastava that there was an untenable proposal for a combined penalty holds no water as it was neither the proposal in the SCN nor was any penalty imposed in that fashion. All the three appeals against the Order dated 19.7.2006 were decided by this Tribunal by Final Order dated 26.4.2017 by remanding the matter to the original authority for the limited purpose of deciding the three issues of eligibility of exemption to CVD and SAD and the effect of the entries in the WIP register. No other issue was remanded to the original authority in the appeal. The original authority was also directed to give adequate opportunity to present any additional documents. Having found against the assessee Diamond Jewellery on all three issues of exemptions from CVD and SAD and the entries in the WIP register, in the impugned order, the Commissioner reaffirmed the demands and penalties imposed in the original order. 33. Since there was no specific direction with respect to the penalty imposed on Shri Shrivastava by the Tribunal in the Final Order remanding the matter to the original authority, evidently, the only re....