TaxTMI 
TaxTMI 
2025 (11) TMI 709
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....s were cleared from port of import to private bonded warehouse on filing of Into-Bond BE on the ICEGATE portal and subsequently, such warehoused goods were cleared to SEZ unit upon filing of Ex-Bond BE for home consumption on the SEZ portal. These BEs were examined and assessed by relevant authorities at the time of exit from warehouse and entry into SEZ area. Based on certain investigations by the Customs department, the department, inter alia, felt that there are certain unaccounted goods at Gowthami Godown and certain other irregularities as regards accountal of imported goods and its clearance to SEZ unit as well as for export and hence SCN dt.07.04.2017 was issued. The adjudicating authority adjudicated the matter and, inter alia, demanded duty of Rs.1,34,19,320/- under section 72(1)(d) and also imposed various penalties under section 72(1)(d), section 112(a), section 117 and section 114AA of the Customs Act. Further, the goods were also confiscated and Redemption Fine (RF) was imposed thereon under section 125 of the Customs Act, 1962. 2. Learned Advocate for the appellant has mainly contested that the demand is not sustainable due to various grounds. For the ease of refer....
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....ed quality degradation and about 222.23 MT was washed out completely. They had, however, without quantifying actual physical damage and due to business exigencies filed Ex-Bond BE No. 45 dt.16.06.2016 for ex-bonding 22397 MT of goods, which were imported vide WBE No.289210 and the same were transported to SEZ unit, however, only 22174 MT was transported (22397 - 222.23) and this shortage was noticed on arrival at their SEZ unit. He has also given details of salvaging certain amount of sugar from the damaged sugar. 6. Therefore, his main contention is that the computation of demand for unaccounted bonded goods itself is not correct and has not considered various factual submissions including documents, as also, the invocation of section 72(1)(d) is not tenable as the entire quantity has been properly ex-bonded and sent to SEZ/exported. In addition, he has also submitted that even for lost quantity of 222.23 MT, the duty thereon needs to be remitted under section 23 of the Customs Act as the loss is due to natural calamitites and the adjudicating authority has not considered this request and has doubted the veracity of the insurance claim itself. Issue (B) - Penalty under secti....
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.... 304 (Bom)] in support that once the goods are cleared for home consumption, they cease to be imported goods. Further, since the goods cannot be confiscated, the RF can also be not imposed under section 125. Reliance was placed on the judgment in the case of Shiv Kripa Ispat Vs CC [2009 (235) ELT 623 (Tri-LB)], which was affirmed by Hon'ble Bombay High Court reported at [2015 (318) ELT A259 (Bom)] and Hon'ble Supreme Court reported at [2010 (255) ELT A120]. Learned Advocate has submitted that penalty under section 112(a) is also not imposable when goods are not available for confiscation. In view of the same, in respect of 10673 MT, the imposition of RF and penalty are not sustainable. Issue (D) - Redemption Fine on Export of 26250 MT of goods: 10. Learned Advocate has submitted that the said goods were exported vide Ex-Bond BE No. 32 dt.09.05.2016, wherein, the department alleged that the said export is without transshipment permission. He further submitted that in terms of Board Circular No.22/2012-Cus dt.07.08.2012, an exporter is entitled to file shipping bill 14 days in advance and therefore, department cannot impose RF merely because Ex-Bond BE has been filed 14 days pr....
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....ted by SEZ Act and Rules made thereunder and they have executed bond with SEZ Authorities for proper accountal of duty-free imported goods and resulting exports. In case of failure to reconcile, the SEZ authorities are imposed to take action under SEZ Act and Rules made thereunder. Issue (1) - Duty demand in respect of 1145.52 MT of goods: 14. We find that the demand has been made in terms of certain nonaccountal of goods by the appellant to the satisfaction of proper officer of Customs, which were brought inside the private bonded warehouse i.e., Inbonded. The appellants have given detailed breakup to account for the same, which includes loss due to cyclone, damaged goods, rejected goods, clearance to SEZ unit under Ex-Bond BE duly acknowledged by the SEZ authorities, etc. We find that in the first place, it is not disputed that the entire goods which were stored in the warehouse were initially imported duty-free by the appellant, who are SEZ unit and were placed in the warehouse. Therefore, its accountal is necessary and any non-accountal would entail demand of duty as well as other penal provisions in terms of Customs Act and Warehousing provisions. However, we find that t....
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....s clearance to SEZ unit for export and thus, will have to be duly accounted for arriving at unexplained quantity. This unexplained quantity shall be leviable to customs duty in terms of Custom Act. This is the subject matter of remand, where this penalty under section 72(1)(d) will also require to be determined after proper reconciliation is done and if any unexplained quantity still remains. Similarly, penalty under section 117 is also set aside. Insofar as penalty under section 114AA is concerned, we find that the goods have been exported and they being SEZ unit and have not claimed any export benefit on the said export, the penalty of Rs.1 crore under section 114AA is also not tenable. We place reliance on the judgment in the case of Interglobe Aviation Ltd (supra) and Sri Krishna Sounds & Lightings (supra). Insofar as confiscation of goods is concerned, we find that these goods have not been physically available and hence, in view of the various case laws cited, the same cannot be confiscated. Further, if the goods cannot be confiscated, the RF also cannot be imposed. In view of the same, RF imposed under section 125 is also not tenable. We find force in the case laws cited by ....
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....BoE at the ICEGATE portal and subsequently, as and when goods were cleared from warehouse to SEZ, they used to file Ex-Bond BoE for home consumption at SEZ portal for bringing the same from warehouse to the SEZ unit by declaring the same as SEZ cargo. It has also been fairly conceded by them that in certain cases, due to certain operational contingency, certain quantity of goods were moved from the port, which were otherwise meant for going to SEZ unit, directly to warehouse, by filing Into-Bond BoE and in some cases, they could not file the Into-Bond BoE. It has also been fairly conceded that certain procedural irregularities might have taken place in bringing non-duty paid goods to warehouse or undertaking certain activities including blending, bagging, etc., in the warehouse without any express permission. ...... 14.1 At this juncture, we also need to understand that SEZ unit is regulated in terms of SEZ Act, 2005 and SEZ Rules, 2006. Section 7 of SEZ Act, 2005 exempts, inter alia, all taxes, duties or cess when any good is either imported or exported by a unit in SEZ or a developer. This is however subject to provisions under section 26. Section 26(1)(e) provides for e....