TaxTMI 
TaxTMI 
2024 (2) TMI 1141
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....tion 112(a) of Customs Act One lakh penalty under section 117 of customs Act C/11076/2021 M/s. JVS INDUSTRIES PVT LIMITED (DTA Unit) A-1/35, GIDC, Makarpura, Vadodara Rs. 36,00,000/- as penalty imposed under Section 112(a) of Customs Act One lakh penalty under section 117 of customs Act C/11077/2021 SHRI NARENDRA SHAH (Partner/Director of JVS Engineers-100% EOU) Rs. 5,00,000/- as penalty imposed under Section 2. Issue pertains to imposition of penalty and confiscation/redemption fine on risers and pipes (hereinafter referred to as "impugned goods/said goods"). According to department, said goods were transported by ONGC to EOU for the purpose of repair activity. However, appellants have done repair activity on said goods at DTA location i.e., M/s. JVS Industries Limited instead of EOU Unit, i.e., M/s. JVS Engineers Limited). Thus according to department this fact (repair activity done at DTA location) has led to violation of TSA bond furnished by ONGC and therefore, appellants are liable for penalty and fine. 3. Appellants had entered into a contract (as appointed by M/s. Vetco Gray Pvt. Ltd., on behalf of ONGC) for carrying....
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....and on said repair activity service tax was also paid, therefore allegation of tax evasion and malafide intention should be set aside. The same has also been observed by the Deputy Commissioner of Central Excise and Customs vide letter dated 08.02.2012. 5.2 That the goods are not liable for confiscation under Section 111(b), (j) and (n) since the goods were neither imported goods nor dutiable or prohibited goods. Since the goods are not liable for confiscation, redemption fine under Section 125 or Penalty under Section 112(a) and 117 of the Customs Act is liable to be set aside, as far as they are concerned. 5.3 Further, the appellant submitted that to rebut testimonial evidence, they had also produced certain forensic evidence by way of expert opinion, as a part of their reply to indicate that no forgery was committed and the testimonial evidence to that effect was in fact under duress but the learned adjudicating authority did not consider the same. As it was stated that proceeding is pending in Court of law and therefore no finding was given to that effect but still the forgery was taken as part of the finding by the adjudicating authority and same was sustained by the Com....
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....ave been subjected to the service tax as per the allegation of the department. However, we find that in the invoice issued by the JVS Engineer not only service tax has been separately shown to the consignee but also the same has been duly paid. Further vide letter dated 16 July, 2007 Vetco had clearly written to Cochin Shipyard Limited that the JVS shed 35 was their approved vendor. We find that not only critical parties like M/s ONGC, Cochin Shipyard Limited as well as Intermediary M/s Vetco have not been investigated in the matter but also show cause notice was issued severally and jointly to M/s JVS Engineer as well as M/s JVS Industries liable for confiscation jointly and severally. Both were neither the importers nor had executed the bond. The rebuttal of testimonial evidence produced by the appellants by way of forensic evidence was not entertained by the adjudicating authority simply on the ground, the same was to be evaluated in pending matter under criminal jurisprudence. This is highly improper way of evaluating evidence based on the presumption that the forensic evidence produced by the defendant can only be allowed to be evaluated in criminal court and not the adjudicat....
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....the warehouse; and (iv) data regarding the volume of trade anticipated of the manufacturing process or other operations; and (v) the applicant shall, on being called upon to do so, furnish such other information as may be required. REGULATION 4. Execution of Bond. The [Assistant Commissioner of Customs or Deputy Commissioner of Customs] may, if he is satisfied that the applicant has carried out such alterations to the warehouse premises as may be required for this purpose and that the volume of trade and other considerations justify grand of sanction direct the applicant to file a bond, undertaking inter alia to- (i) observe all the provisions of these regulations; (ii) maintain detailed accounts of all imported and other goods used in the manufacturing process or other operations in the proper form and to produce such accounts for inspection by the proper officer; (iii) submit detailed statements of all imported and other goods used in the manufacturing process or other operations and those remaining in stock, at any time the proper officer directs; [(iv) provide to the officers of customs office space, wherever requir....
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....goods, waste and refuse in proper form: Provided that where the manufacturer maintains for his own purpose such detailed accounts and has carried such alteration in the form of accounts as may be required in this behalf, the Assistant Commissioner of Customs or Deputy Commissioner of customs may in his discretion direct such forms of accounts to be adopted as the proper form. REGULATION 10. Accounts to be accessible to Customs Officer. - The proper officer may, at any time, inspect or call for the accounts and connected records for scrutiny. REGULATION 12. Issue and return of imported goods to/from the manufacturing process or other operations.- (a) The Assistant Commissioner of Customs or Deputy Commissioner of Customs shall, having regard to the manufacturing process or other operations to be carried on in the warehouse, direct the manner in which the imported goods shall be issued from and the unused items received back into stock. (b) The application for issue of imported goods and the vouchers against which the unused items may be returned shall be in the proper form. 16. Whereas it further appears that Section 54 of the Cu....
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....ock. (4) The proper officer shall have access to every part of a warehouse and power to examine the goods therein. 18. Whereas, it further appears that Section 71 of the act ibid enjoins that the goods not be taken out of warehouse except as provided by this Act which reads as under: SECTION-71"No warehoused goods shall be taken out of a warehouse except on clearance for home consumption or reexportation, or for removal to another warehouse, or as otherwise provided by this Act." 19. Whereas it further appears that Section 111 of the Customs Act, 1962 read as under 111. Confiscation of improperly imported goods, etc. - The following goods brought from a place outside India shall be liable to confiscation:- (j) any dutiable or prohibited goods removed or attempted to be removed from a customs area or a warehouse without the permission of the proper officer or contrary to the terms of such permission;" All above Regulations are seemingly quoted out of context e.g. Regulation 3 requires owner to make application for seeking permission for manufacture in bond. Regulation 4 require to execution of bond for grant ....
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....ed period as such officer may allow, a certificate issued by the proper officer at the place of destination that the goods have arrived at that place, the bond shall stand discharged, but otherwise an amount equal to the import duty leviable on the goods in respect of which the said certificate is not produced shall stand forfeited. REGULATION 5. Surety or security to be furnished. = The proper officer may require that the bond shall be with such surety or security or both as is acceptable to him." 7.4 It is clear from the foregoing that the regulations require that the persons removing the goods from warehouse has obligation to pay duty in case goods are not received within three months or such extended period as a proper officer may extend and in case the proof of receipt is not received then the permission is required to be cancelled and duty bond enforced. Coming to the Clause 111(J), it is clear that the same can be thus enforced against the person who attempts to remove or actually removes goods from Customs area or warehouse without the permission of the proper officer or contrary to the terms of such conditions. The Clause comes into operation only when goods ar....