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Issues:
1. Alleged fraudulent importation and diversion of cyanuric chloride under the DEEC Scheme. 2. Confiscation of consignments and imposition of penalties by the Commissioner of Customs, Mumbai. 3. Appeal against the penalties imposed on the appellants under Sections 111 and 112 of the Customs Act, 1962. Issue 1: Alleged fraudulent importation and diversion of cyanuric chloride under the DEEC Scheme: The case involved fraudulent importation of cyanuric chloride by fictitious firms for clearance without duty payment under the DEEC Scheme. Investigations revealed the involvement of various individuals in the scheme, including the use of bogus certificates, non-existent supporting manufacturers, and diversion of goods for sale in the open market. The Commissioner confirmed duty demands, ordered confiscation of seized goods, and imposed penalties on the co-noticees. Issue 2: Confiscation of consignments and penalties imposed: The Commissioner found M/s. Vishal International and M/s. Patel Chemical Industries to be bogus units involved in fraudulent activities. The confiscated consignments were not challenged. The penalties were imposed under Sections 111(d), (m), and (o) of the Customs Act. The focus of the appeal was on the imposition of penalties on the appellants under Section 112(a) and (b) for their involvement in unauthorized importation, evasion of duty, and dealing with goods liable for confiscation. Issue 3: Appeal against penalties imposed under Sections 111 and 112: The appellants challenged the penalties imposed on them, arguing that they lacked knowledge or reasonable belief that the imported goods were to be diverted for sale in the domestic market. The Tribunal analyzed the evidence and statements of the individuals involved. It was determined that the appellants did not have sufficient knowledge or belief regarding the diversion of goods, leading to the setting aside of penalties on all four appellants. In conclusion, the Tribunal set aside the penalties imposed on the appellants as there was insufficient evidence to prove their knowledge or reasonable belief regarding the diversion of goods imported under the DEEC Scheme. The judgment highlighted the importance of establishing intent and awareness in cases involving customs violations and emphasized the need for clear evidence to support penalty imposition under relevant sections of the Customs Act, 1962.
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