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2024 (9) TMI 74
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....imposing penalty on the appellant is correct and legal in the facts of this case?" 3. The brief facts giving rise to this appeal are that appellant is a 100% expert oriented undertaking (for short 'EOU') was engaged in business of manufacturing twisted yarns and polyester filament yarns (hereinafter referred to as "PFY"). 3.1. The appellant was allowed to import PFY free of duty being 100% EOU for utilizing such inputs in or in relation to the manufacture of permitted goods meant for exports. 3.2. The appellant was also permitted to deliver imported inputs to other EOUs for enabling them to manufacture goods meant for exports from the imported inputs. 3.3. The Officers of the Directorate General of Anti Evasion conducted enquiry at the premises of the appellant on 30.11.1999 and verified the stocks of materials and finished goods lying in the factory as well as statutory records maintained by the appellant. 3.4. During the course of enquiry the officers also visited premises of parties namely M/S. Jay Krishna Sizers and M/S. Carewell Rayons Pvt. Ltd. and seized 1800 kgs and 4842 kgs of PFY at the respective premises of the above said concerns on the ground that no evidence sho....
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....th the brokers and their buyers and obtained sale proceeds in cash. Such diversion clearly amounts to violation of the provisions of the Notification. Therefore, duty not paid at the time of imports becomes recoverable from them. The appellants have not been able to rebut the charge and finding of diversion which is clearly based upon statement of the Director of the 100% EOU. The only argument raised before us that the 100% EOU was not the importer and therefore, could not be held liable to duty, and that duty demand, if at all, could be raised only against M/s. Jay Krishna Sizers and M/s. Carewell Rayons Pvt. Ltd. who purchased imported raw materials and to whom provisional release of the goods was allowed, cannot be accepted for the reason that the Director of the 100% EOU had admitted that the EOU had imported PFY duty free and no document has been produced to show that the goods were imported by some one else, and the option to redeem the goods seized from the premises of M/s. Jay Krishna Sizers and M/s. Carewell Rayons Pvt. Ltd. has been given to 100% EOU." 3.11. Being aggrieved, the appellant has filed this appeal proposing the two questions of law, out of which, the questi....
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....ow that the goods in questions were imported by the appellant, no duty and penalty could have been fastened upon the appellant. 4.3. It was further submitted that the appellant was never given an option to redeem the goods which were seized from M/s. Jay Krishna Sizers and M/s. Carewell Rayons Pvt. Ltd. and the Tribunal has therefore, committed an error by observing that the option to redeem the goods was given to the appellant. It was therefore submitted that on both the counts, the order-in-original and the order of the Tribunal cannot be sustained and are liable to be quashed and set a side so far as the recovery of the customs duty and imposition of the penalty qua appellant is concerned. 4.4. Learned advocate Mr. Sudhanshu Bissa for the appellant also referred to and relied upon the decision of the Hon'ble Kerala High Court in case of Commissioner of Customs, Kochi Vs. Nalin Choksey in Customs Appeal No. 18 of 2009, decided on 03.04.2018, to submit that the appellant cannot be saddled with payment of duty as the goods have been provisionally released in favour of the two concerns from whom, the same were found. The Hon'ble Kerala High Court in the said case has observed as u....
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....ch confiscation could proceed for recovery of duty too, but only from the importer." 5. On the other hand learned advocate Mr. C.B. Gupta supported the impugned orders passed by the Adjudicating Authority and the Tribunal. 6. Having heard the learned advocates for the respective parties and considering the concurrent findings of the fact recorded by the Adjudicating Authority as well as the Tribunal, it is not in dispute that the appellant company, which is part of the concerned group of company was involved in clandestine removal of imported PFY in the local market and as such there is a clear breach of Notification No. 59 of 1998 for manufacture of export goods by diverting the same in connivance with the brokers and the buyers and to obtain the sale proceeds in cash. It would be therefore necessary to elaborate the findings given by the Adjudicating Authority while passing the order to recover the customs duty and imposing the penalty upon appellant as under: "43. In the SCN there is allegation that M/s Kansal Texo Tube Pvt. Ltd. (100% EQU) were involved in the clandestine removal of imported yarn which they had received duty free under Notification 59/98 dated 3.8.98 (as am....
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.... 1800 kgs of FDY valued at Rs. 1,53,000/- under Section 111 (J) of Customs Act, 1962 and/or erstwhile Rule 209(d) of Central Excise Rules, 1944, 1 note from the panchanama dated 30.11.99 that the same is typed one. Further the officers who visited M/s Jay Krishna Sizers, GIDC, Sachin on 30.11.99 itself and searched the premises of the said unit, recovered certain documents. The officers also found imported yarn manufactured by M/s Hualon for which Shri D.L. Boghra partner could not produce any valid purchase documents. The officers seized 1800 kgs of FDY-150/48 Y having lot number 68722 valued at Rs. 1,53,000/- under panchanama dated 30.11.99 on the reasonable belief that the said yarn being offending goods cleared without payment of duty and without any documents was liable for confiscation under the provisions of Central Excise Law. I have also perused the statement of Shri D.L. Boghra dated 30.11.99 and 24.5.2000 wherein he inter alia stated that he was partner in M/s Jay Krishna and Proprietor of M/s Captain Products; that they purchased polyester filament yarn of 50/36, 60/36, 70/72, 75/36, 115/36, 150/36 and 150/48 from many companies through brokers; that they purchased PFY ....