AI Drafter 
TaxTMI 
TaxTMI 
2024 (12) TMI 1037
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.... of bank guarantee, besides imposing penalties of Rs.5,00,000/- on the Appellant A1 and Rs.2,00,000/- each on Chairman(A2) and Managing Director(A3) of the Appellant company under Section 112(a) of the ACT ibid. Customs Appeals No. 42171/2014 and 42172/2014 were filed by the Appellants A2 and A3, and as all the above three appeals are connected matters involving the same impugned order, the appeals are being taken up together for decision by this common order. 2. Briefly stated the facts are that Directorate General of Central Excise Initelligence (DGCEI) conducted an investigation into imports of capital goods valued at Rs.20,01,60,280/- made by the Appellant during March 1997 under zero duty EPCG Scheme but could not export the resultant products resulting in issuance of a Show Cause notice dated 02.12.05 alleging contravention of EPCG scheme and seeking to deny the benefit of Customs-Notification No. 111/95-Cus dated 05.06.1995 and consequently proposed to demand Customs duty of Rs.7,89,45,622/- along with applicable interest and to impose penalty under Section 112(a) of the ACT on the Appellant company and its officials besides, proposing to confiscate the goods imported dut....
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....iance placed in the impugned order on the decision of the Bombay Hospital Trust was misplaced as the goods imported by Bombay Hospital Trust were seized by the Customs Authorities and were available for confiscation whereas in the case of the appellants admittedly the goods in question were not even available for seizure more particularly when the duty assessed in respect of the goods was available with the customs in the form of BG which was encashed by the Department leaving no scope for any action under Sec. 111 [o] of the Customs Act to warrant invocation of Sec. 125 [2] of the Customs Act and rightly so the notice only invoked Sec. 12 and not Sec. 28 or 125 of the Act. iv. It was submitted that non-fulfilment of the Export Obligation was due to South Asian Crisis and Global recession in the infrastructure industry but the penalty imposed by the respondent on the appellants even after realising the duty on the imported goods and when Sec. 111 [o] of the Act was not invokable for the reason recorded to the contrary that they violated the notification and that they did not account for the discharge of the EO nor informed the authorities, which are contrary to the express....
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....s liable to be ignored. 4.3 It was averred that the Appellants' reliance on the decision in the case of Rajalakshmi Labs was not applicable as in the cited case there was bonafide utilization of goods during the prescribed period whereas, in the present case, there was no intention to fulfil the export obligation. Moreover, the said order was distinguished by Tribunal, Mumbai in the case of Prakash Roadlines Corporation Pvt. Ltd. Vs CC(EP), Mumbai [2019 (369) ELT 663 (Tri.-Mumbai)] and hence, not applicable to facts of this case. 4.4 It was submitted that even after availing huge bank loans from banks and financial institutions, the Appellant had not commenced production of silicon cells over a period of years resulting in non-fulfillment of export obligation even after a period of 8 years under EPCG scheme, thereby violating the conditions of the said Customs Notification which proves their mens rea and hence, the imported goods were liable for confiscation, as held in the decision in the case of Weston Components Limited Vs. Commissioner of Customs, New Delhi [2000 (115) ELT 278 (Tri.-New Delhi)] which ratio was also followed by the CESTAT, Chennai in Farida Prime Tannery V....
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....o give Bank Guarantee for the full amount of duty. We find there is a difference between the Bank Guarantee amount and the impugned duty demand quantified and confirmed against the appellants. Had the appellants been present at the time of personal hearing, the computation of the duty amount could have been arrived at with their participation. Since, the appellants have not availed such opportunity, we are of the view that they should be given a second chance to go before the original authority for re-quantification of the correct amount of duty liability. We are also of the view that in a case such as this, where the non-fulfillment of export obligation is not deliberate but on account of the recession in the international market and other economic factors, a lenient view requires to be taken in regard to the amounts of fine and penalty. The ratio of the cited decision in the case of Rajayalakshmi Labs. Ltd (supra) is also required to be taken into account by the adjudicating Commissioner." 8. The Tribunal Chennai has clearly ordered that the duty amount payable by the Appellant (A1) to be the amount leviable on the imported goods at the time of import but for exemption availed....
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....reeable to being premised on erroneous assertion. His assumption that the Bond amount only can be demanded is not even supported by the Tribunal's Final Order Nos. 454-456 dated 03.05.2012 which has clearly specified that the duty leviable is the duty payable at the time of import, but for the exemption under Notification No. 11/95-Cus dated 05.06.1995. The said Final Order of this Tribunal has attained finality with both the parties accepting the same. 9. We also find that the Adjudicating Authority in the impugned de-novo proceedings has considered the above observations of this Tribunal in Paragraph 7 and reduced the penalties imposed on A1, A2 and A3, considering the recession and prevailing economic conditions at that time. Further, in the present appeal, the Appellant is not only disputing the duty amount but also has contended that the demand of duty and confiscation was not to be confirmed in terms of Section 28/ 125 of the ACT. 10. The Larger Bench of the Tribunal in the case of Bombay Hospital Trust Vs. Commissioner of Customs, Mumbai [2005 (188) ELT 374] has held that when post importation conditions in an exemption notification are not fulfilled, the Department ha....
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....ccount of failure to fulfil the post-importation conditions under the Notification No. 64/88, the said Section 28 has no application to a duty demand of this kind. We do not, therefore, wish to dwell further on the inapplicability of Section 28 to such demands. However, we note that since no specific time limit is prescribed under any other provision of the statute, the notice of demand in such cases cannot be subjected to any limitation of time. This view is supported by the ratio of the following two decisions of the Honourable Bombay High Court and the Apex Court :- (i) Prakash Cotton Mills Pvt. Ltd. v. S.K. Bhardwaj, A.C.C.E. - 1987 (32) E.LT. 534 (Bombay) (ii) Commissioner v. Raghuvar (India) Ltd. - 2000 (118) E.L.T. 311 (S.C.) 13. We find that while Section 12 gives the power to levy customs duty, Section 25 gives the power to grant exemption of duty in the public interest either absolutely or subject to conditions. In the case of Notification No. 64/88, the exemption granted is conditional. The conditions relating to (i) free treatment of 40% outdoor patients and (ii) reservation of 10% of beds for free treatment of patients with family income less....
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.... than Rs. 500/- p.m. The competent authority, therefore, should continue to be vigilant and check whether the undertakings given by the applicants are being duly compiled with after getting the benefit of the exemption notification and importing the equipment without payment of customs duty and if on such enquiry the authorities are satisfied that the continuing obligation are not being carried out then it would be fully open to the authority to ask the person who have availed of the benefit of exemption to pay the duty payable in respect of the equipments which have been imported without payment of customs duty. Needless to mention the Government has granted exemption from payment of customs duty with the sole object that 40% of all outdoor patients and entire indoor patients of the low income group whose income is less than Rs. 500/- p.m. would be able to receive free treatment in the Institute. That objective must be achieved at any cost, and the very authority who have granted such certificate of exemption would ensure that the obligation imposed on the persons availing of the exemption notification are being duly carried out and on being satisfied that the said obligations hav....
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....ate in two different fields. The fine under Section 125 is in lieu of confiscation of the goods. The payment of fine followed up by payment of duty and other charges leviable, as per sub-section (2) of Section 125, fetches relief for the goods from getting confiscated. By subjecting the goods to payment of duty and other charges, the improper and irregular importation is sought to be regularised, whereas, by subjecting the goods to payment of fine under sub-section (1) of Section 125, the goods are saved from getting confiscated. Hence, the availability of the goods is not necessary for imposing the redemption fine. The opening words of Section 125, "Whenever confiscation of any goods is authorised by this Act ....", brings out the point clearly. The power to impose redemption fine springs from the authorisation of confiscation of goods provided for under Section 111 of the Act. When once power of authorisation for confiscation of goods gets traced to the said Section 111 of the Act, we are of the opinion that the physical availability of goods is not so much relevant. The redemption fine is in fact to avoid such consequences flowing from Section 111 only. Hence, the payment of red....