AI Drafter 
TaxTMI 
TaxTMI 
2025 (4) TMI 255
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.... (ii) I confirm the demand of Customs duties of Rs.14,06,421/- (Rupees Fourteen Lacs Six Thousand Four hundred and Twenty One Only) under Section 28 of the Customs Act, 1962, read with Section 12(1), 46(1), 47(1), 68, 71 of the Customs Act, 1962; Section 30 of the SEZ Act, 2005; Rule 25, 34, 47 and 48 of the SEZ Rules, 2006, and conditions of the Bond-cum-Legal Undertaking dated 17.06.2015. I order to recover the said demand of Rs. 14,06,421/- from M/s Baba Global Limited. (iii) I confirm the demand of interest on the said amount of duty of Rs. 14,06,421/- under Section 28AA of the Customs Act, 1962, and order to recover the same from M/s E ba Global Limited. (iv) I order to enforce the provisions of Bond-cum-Legal Undertaking dated 7.06.2015, executed by M/s Baba Global Limited for recovery of the aforesaid Redemption Fine, duty and interest thereon. (v) I impose penalty of Rs. 14,06,421/-( Rupees Fourteen Lacs Six Thousand Four hundred and Twenty One Only) on M/s Baba Global Limited under Section 114 A of the Customs Act, 1962 (vi) I impose penalty of Rs. 14,06,421/-(Rupees Fourteen Lacs Six Thousand Four hundred and Twenty One Only) on....
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....ger and the same was by mistake not taken into account on the day of stock verification as the G.M Shri R.K. Jain was not in the factory on 10.01.2017 and he was not aware about the said stock of saffron. 2.7 After completion investigation and examination of records for the last 5 years, stock of raw material saffron was found short by 37.34 kgs, having value of Rs.38,92,023/- on which Customs duty comes to Rs.14,06,421/-. The duty is liable to be recovered under Section 30 of the SEZ Act, 2005, read with Rule 25,34,47 (4) and 48 (2) off SEZ Rules, 2006, read with Section 28 of the Customs Act, 1962. 2.8 Show cause notice dated 04.01.2019 was issued to the appellant-I, asking to them as to why- "(a) 37.34 kg of Saffron valued at Rs 38.92.023/- involving duty of Rs.14,06,421/- found short at the time of stock taking on 10.01 2017/23.01.2017, which was not duly accounted for and appeared to have been clandestinely removed from NSEZ to DTA from their Unit in terms of various provisions of SEZ Act 2005, SEZ Rules and Customs Act 1968 as explained hereinabove, should not be confiscated under Section 111 (j) of Customs Act 1962, and since the goods were not available for s....
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....mand of duty. Rule 25 of the SEZ Rules was not applicable in respect of goods found short of stock taking; Rule 34 only seems to apply, but there is no provision of interest or penalty in the rule. Redemption fine imposed, cannot be justified. It is settled law that the goods which are not available could not have been confiscated. Reliance is placed on the decision of this Tribunal in the case of Commissioner of Customs, Mumbai Vs JEWEL Tech India Pvt. Ltd. 2016 (9) TMI 522-CESTAT-Mumbai. Penalty imposed on appellant-II is not justified. 3.3 Authorized Representative reiterates the findings recorded in the orders of the lower authorities. 4.1 We have considered the impugned orders along with the submissions made in appeal and during the course of argument. 4.2 For upholding Order-in-Original, impugned order records as follows:- "5.1 After going through the entire issue, I observe that as per directions of the specified officer, the export consignment of Chewing Tobacco of the importer was subjected to surprise check, in which some discrepancies relating to Brand Name of the product were noticed on account of which a team of off....
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....tory remains with him and whenever there is requirement to prepare a new batch, he prepares the new mixture in the Lab. The above said facts indicate that he is involved in day to day work of the factory as well as absence for long period of sixty days. Both of the above situation is not in harmony rather contradictory. I find that use and issue of saffron was under complete control of Sh. Ravinder Kumar and therefore he was responsible for maintaining proper records and proper use of saffron, as prescribed in the SEZ Act, 2005, and the SEZ Rules, 2006. Since, he has willfully indulged in diversion of saffron to DTA without payment of duty and suppressed the facts of diversion from authorities, so I hold him liable for penalty under Section 112 (b)(ii) the Customs Act, 1962. 5.3 As regards the contention of the appellant that the NSEZ officers are not legally authorized to conduct investigation and the Additional Commissioner, Noida Customs Commissionerate, is also not proper authority for issuing S.C.N., I find that the proper reply has already been given by the adjudicating authority in the impugned order." 4.3 In the present case, I observe that stock verification an....
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....g stock in the manner as detailed below as per the show cause notice:- "10. In response to this office letter dated 15.11.2018, party vide letter dated 19.11.2018 (RUD-11) have submitted attested copies of consolidated audited balance sheet and Profit & Loss statement along with relevant extracts of Schedule of the Balance sheet for the year 2012-13.2013-14,2014-15,2015-16 and 2016-17 as a documentary evidence for consumption of Saffron' for the relevant period. Further party submitted that they have only one manufacturing unit which is situated at F- 586,SDF NSEZ, Noida II is observed that the Balance sheets are duly audited, and accordingly, the quantity of Saffron consumed has been adopted from the said information. The following chart has been prepared on the basis of the said consolidated Balance sheets and chart earlier submitted by the party on 18.09.2018. Balance sheet for Financial Year Consumption of saffron as declared by the party vide letter dated 18.09.2018 (in Kg.) Value of Saffron consumed for manufacture of Chewing Tobacco, as per Balance Sheet (Rs.) 2012-2013 35.340 2102352.86 2013-2014 45.500 4309098.67 ....
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....) (Kg.) (details given in para 9 of page5) Quantity consumed during the five years (2012-13 to2016-17) (Kg.) Book balance (Kg.) Actual quantity found during checking (Kg.) Shortage of Saffron detected (Kg.) 49.34 283.35 240.37 92.32 54.98 37.34 4.6 We observe that the entire foundation is based on the assumption and presumptions of examination figures shown in balance sheet, not in terms of freight and in terms of value and finally the said calculated quantity of exemption has been deducted from the total quantity source and procured to arrive at the total value. Further, while computing these values, no reliance has been given to the 20 kg of saffron available in the GM's fridge. As per appellant, it was available in the GM's fridge. No reason has been given for not taking into account the said quantity of saffron which was available in the factory premises, except that it was not disclosed at the time of stock taking. During the stock taking done on 10.01.2017 it was responsibility of the officers to find out all the stocks of finished goods and raw material and do the stock taking. 4.7 It is not understood as to why such approach for computati....
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....hosen to measure some quantity and found the same to be in order and dropped the proceedings. When it was convenient for the department to do physical verification for some portion of the goods, they should have done the same exercise for the other portion also. Merely because eye estimation was given it does not absolve of the department's responsibility to carry out physical verification of the goods and confirm demand duty on that basis. In view of the clear cut law laid down by the cited judgments, the appellants prayer is required to be accepted by setting aside the impugned order and allowing the appeal. 4.11 We find that the admitted position is that after the receipt of the saffron in the factory premises the same is handed over to the Appellant 2, who uses the same in the laboratory were no one else is allowed to enter. He do not maintain any record of consumption of the said saffron in the laboratory. Even while submitting the figures vide letter dated 19.11.2018 the figures of closing balance year wise were given by him to adjust with the closing stock available in the factory, without reference to any document maintained by him or in the unit. Thus, we find that ther....
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....E.L.T. 185 (P&H) = 2008-TIOL-280-HC-P&H-CUS held :- "12. It may also be noticed here that in the case of M/s. Weston Components Ltd. v. Commissioner of Customs, New Delhi (supra), the goods were released to the assessee on an application made by it and on the execution of a bond by the assessee and in those circumstances, the Hon'ble Apex Court held that the mere fact that the goods were released on the bond being executed would not take away the power of custom authority to levy redemption fine. A reading of the judgment/order of the Hon'ble Apex Court in M/s. Weston Components Ltd. v. Commissioner of Customs, New Delhi (supra), would show that the Apex Court has taken the view that redemption fine can be imposed even in the absence of the goods as the goods were released to the appellant on an application made by it and on the appellant executing a bond. Since the goods were released on a bond the position is as if the goods were available. The ratio of the above decision cannot be understood that in all cases the goods were permitted to be cleared initially and later proceedings were taken for under-valuation or other irregularity, even then redemption fine coul....
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....r the appellant that redemption fine could not be imposed because the goods were no longer in the custody of the respondent- authority. It is an admitted fact that the goods were released to the appellant on an application made by it and on the appellant executing a bond. Under these circumstances if subsequently it is found that the import was not valid or that there was any other irregularity which would entitle the customs authorities to confiscate the said goods, then the mere fact that the goods were released on the bond being executed, would not take away the power of the customs authorities to levy redemption fine. 2. The appeal is dismissed.' It is apparent from the decision of Hon'ble Supreme Court that if the goods are released in custody of a person under a bond then the same can be confiscated even if the same are not physically available. The respondent relied upon the decision of the Tribunal in the case of SS Watch Industries Vs. CC (I) New Delhi - 2011 (274) ELT 369 (Tri - Del) =2008-TIOL-2826-CESTAT-DEL to assert that when the goods are not physically available no redemption fine can be imposed. In the said decision, the Tribunal has obser....
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....ain plant of the Revenue's appeal is that the commissioner has erred in refraining from formally confiscating and imposing redemption fine on of goods. In our view, the revenue appeal is on diversion of imports and inasmuch as when the goods are not there for confiscation, the question of confiscation cannot arise. Reliance placed by the revenue on the judgment of the Supreme Court in the case of Western Components [2000 (115) E.L.T. 278 (S.C.)] is also misplaced in the facts of the case in hand. Adjudicating Authority has himself held that the respondent's assessee is liable to pay Central Excise duty on the goods manufactured out of the raw materials imported on which the revenue has foregone the Customs duty. ii) GUNJAN EXPORTS 2013 (295) E.L.T. 733 5. I have considered the submissions and I find myself unable to appreciate the submissions. The Hon'ble Supreme Court had clearly held in the case of Weston Components Limited that when the goods are released provisionally on execution of bond, confiscation can be affected even if the goods are not available. The natural conclusion is that the goods should have been released on bond which would mean tha....