TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 764
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....aw materials" of 40.78 Carats under Invoice No. US920542 dated 17.01.2021 from M/s Dharam International LLC, USA. Accordingly, the said BOE dated 03.03.2021 was assessed by the proper officer with a direction/remark of examination/appraisement (written on back side of BOE). 3. On 04.03.2021, after opening the box for appraisement, it was found that there was another box inside it alongwith an invoice bearing Memo No. US920542/0638 dated 17.01.2021. As per the said invoice, the quantity of the goods was 3100 pcs. of polished diamonds and weight was shown as 93.14 Carats having value of USD 22,353.60 (@$240 per carat) whereas, as per the invoice Memo No. US920542 dated 17.01.2021, attached with the BoE No.1001510 dated 03.03.2021, the declared quantity was 40.78 Carats valuing USD 11,826.20 (@$290 per Carat). This raised a suspicion of mis-declaration and subsequently, the Appraiser (Jewellery Expert) appraised/ examined the said consignment randomly and picked the stones for appraisement and after appraisement, he gave his detailed report. The Appraiser also confirmed that the said natural diamonds having white sparkling colour, are of 93.14 carats, having present market value as....
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....ical error on Appellant's part and that the Appellants do not want any personal hearing in the matter and requested for passing of necessary order by the competent authority in respect of goods seized and the acceptance of this request would enable Appellants to execute the export order at an early date. This was followed by another letter dated 23.03.2021. Vide another letter dated 08.04.2021, the Appellants requested for provisional release. 6. Vide letter dated 03.06.2021, Appellants informed that the goods after manufacture from the total imported quantity have been exported against the imported quantity. Vide letter dated 21.06.2021, Appellants again submitted that the proceeding initiated by way of seizure of goods may be concluded and Bond and Bank Guarantee be released. The entire exercise in the present case is Revenue Neutral as the unit is eligible for exemption from payment of Custom duties under Section 26 of the SEZ Act, 2005. Vide letter dated 29.06.2021, Appellants submitted that it was a bona fide mistake/ clerical error on their part and there was no intention to evade payment of Custom duty or contravene any provision of Law and it was requested to amend the B....
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....s of the Special Economic Zones Act, 2005 provide for import of raw materials duty free by an SEZ unit which is used for manufacture of export goods. As per the provisions of SEZ, no customs duty is payable on import of raw material which is used for export of goods. Thus, there is no revenue implication in the present case, since goods manufactured out of the imported raw material were to be exported and have been actually exported as per letter dated 03.06.2021 filed with the authorities intimating exports i.e. exported even prior to oral show cause notice dated 02.07.2021. Therefore, there was no need to adjudicate this matter when admittedly the goods manufactured out of the imported goods have been exported and there is no revenue implication as such. 10. The goods have been ordered to be confiscated under Section 111(m) and 111(o) of the Customs Act, 1962. The Adjudicating Authority has passed the following order:- "I. I confiscate the goods, namely "Polished Diamonds (Raw Material) having weight 93.14 Carat of appraised value of Rs. 19,90,681/- (Rupees Nineteen lakhs ninety thousand six hundred eighty one only)" which were already seized on 11.03.2021, under Sect....
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.... Appellant be dismissed being devoid of any merits. 14. Heard both the sides and perused the appeal records. 15. I find that goods are ordered to be confiscated under Section 111(m) and 111(o) of the Customs Act, 1962. Before proceeding relevant provisions are reproduced below:- Section 111 in The Customs Act, 1962 111. Confiscation of improperly imported goods, etc. - The following goods brought from a place outside India shall be liable to confiscation:- (a)***************** (m) [any goods which do not correspond in respect of value or in any other particular] [ Substituted by Act 36 of 1973, Section 2, for certain words (w.e.f. 1.9.1973).] with the entry made under this Act or in the case of baggage with the declaration made under section 77 [in respect thereof, or in the case of goods under transhipment, with the declaration for transhipment referred to in the proviso to sub-section (1) of section 54] [ Substituted by Act 27 of 1999, Section 108, for " in respect thereof;" (w.e.f. 11.5.1999).]; (n)******************; (o) any goods exempted, subject to any condition, from duty or any prohibition in respect of the i....
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.... securities transaction tax leviable under section 98 of the Finance (No. 2) Act, 2004 (23 of 2004) in case the taxable securities transactions are entered into by a non-resident through the International Financial Services Centre; (g) exemption from the levy of taxes on the sale or purchase of goods other than newspapers under the Central Sales Tax Act, 1956 (74 of 1956) if such goods are meant to carry on the authorised operations by the Developer or entrepreneur. (2) The Central Government may prescribe the manner in which, and the terms and conditions subject to which, the exemptions, concessions, drawback or other benefits shall be granted to the Developer or entrepreneur under sub-section (1). 27.******************** 30. Domestic clearance by Units.- Subject to the conditions specified in the rules made by the Central Government in this behalf:- (a) any goods removed from a Special Economic Zone to the Domestic Tariff Area shall be chargeable to duties of customs including anti-dumping, countervailing and safeguard duties under the Customs Tariff Act, 1975 (51 of 1975), where applicable, as leviable on such goods when impo....
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....gns any documents etc. It cannot be an artificial person like a company. Therefore, per force, it follows that knowledge or intention can be of a natural person and not of an artificial person. Therefore, Section 114AA is attracted qua a natural person (individual) only and not qua companies. 21. Identical provision existed in erstwhile Central Excise Rules, 1944 wherein Rule 209A read as under: "Rule 209A. Any person who acquires possession of, or is in any way concerned in transporting, removing, depositing, keeping, concealing, selling or purchasing, or in any other manner deals with, any excisable goods which he knows or has reason to believe are liable to confiscation under the Act or these rules, shall be liable to a penalty not exceeding three times the value of such goods or five thousand rupees, whichever is greater." 22. After the Central Excise Rules, 1944 were rescinded and new rules namely, the Central Excise Rules, 2002 were introduced, Rule 26 thereof read as under: "Rule 26. Any person who acquires possession of, or is in any way concerned in transporting, removing, depositing, keeping, concealing, selling or purchasing, or in any other manne....
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....e booking clerk is in knowledge and hence he is liable to be penalized under the said Rule 209A. Accordingly, we find that the conclusion reached by the Tribunal in the case of Indian Roadways Corporation Ltd. (supra) is also correct and does not require any reconsideration." 24. In the case of WOODMEN INDUSTRIES vs. CCE PATNA- 2004 (164) E.L.T. 339 (Tri. - Kolkata) affirmed at 2004 (170) E.L.T. A307 (S.C.), it was held that Rule 26 permits imposition of penalty on a person and not on the firm. Since Civil Appeal filed by the Department against the decision of the Tribunal was dismissed by the Hon'ble Supreme Court, by application of doctrine of merger as per Apex Court Judgment in the cases of Kunhayammed versus State of Kerala reported in (2006) SCC 359, in the case of Khoday Distilleries Ltd. (now known as Khoday India Limited) and others v. Sri Mahadeshwara Sahakarasakkare Karkhane Ltd., Kollegal (under liquidation) reported in 2019 4 SCC 376 and in the case of V.M. Salgaocar & Bros.(P.) Ltd. v. CIT reported in (2000) 243 ITR 383 (SC), Final Order of the Tribunal becomes judgment of the Hon'ble Supreme Court, which becomes law of the land in terms of Article 142. 25. Reli....
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....to be set aside so far as it upholds the penalty under Section 114AA of the Customs Act, 1962. 28. Penalty of Rs.10,500/- has been imposed under Section 112(a) & (b)(ii) of the Customs Act, 1962. Relevant provisions read as under: "SECTION 112. Penalty for improper importation of goods, etc.- Any person, - (a) who, in relation to any goods, does or omits to do any act which act or omission would render such goods liable to confiscation under section 111, or abets the doing or omission of such an act, or (b) who acquires possession of or is in any way concerned in carrying, removing, depositing, harbouring, keeping, concealing, selling or purchasing, or in any other manner dealing with any goods which he knows or has reason to believe are liable to confiscation under section 111, shall be liable, - (i) ........ (ii) in the case of dutiable goods, other than prohibited goods, subject to the provisions of section 114A, to a penalty not exceeding ten per cent. of the duty sought to be evaded or five thousand rupees, whichever is higher : ........." 29. There are two clauses of Section 112. Clause (a) or clause (b) sep....