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Issues:
1. Confiscation of machinery without proper notice and proposal in the show cause notice. 2. Imposition of penalty under Section 112(a)(b) of the Customs Act. Analysis: Issue 1: Confiscation of machinery without proper notice and proposal in the show cause notice The appeal in this case stemmed from an Order-In-Original (OIO) dated 29-4-2004, where the Commissioner of Customs had ordered the confiscation of machinery valued at Rs. 86,70,648/- and imposed a redemption fine of Rs. 2 lakhs. The appellant contended that the show cause notice dated 10-12-1999 did not propose to confiscate the machinery, but only suggested imposing a penalty under Section 112(a)(b) of the Customs Act. The appellant argued that since there was no clear proposal to confiscate the machinery in the show cause notice, the subsequent order of confiscation and imposition of a fine was not justified. Issue 2: Imposition of penalty under Section 112(a)(b) of the Customs Act The learned counsel for the appellant referred to para 15(ii) of the show cause notice, which directed M/s. ASL to show cause as to why the goods should not be seized and confiscated. It was highlighted that the proposal to confiscate was made to M/s. ASL, the original importer, and not to the current owners, M/s. Cuddapah Spinning Mills, from whom the goods were eventually confiscated. Citing a precedent case, M/s. Trilux Electric Pvt. Ltd. v. CC, Bangalore, the Tribunal had previously held that confiscation is not sustainable in the absence of notice to the actual owners of the goods. The Tribunal had relied on earlier judgments, including Chiranika International v. Commissioner and a Supreme Court case, Collector v. Decent Dyeing Co, which established that goods purchased in the market are presumed to be duty paid. Upon careful consideration of the submissions and the show cause notice, the Tribunal acknowledged that while the notice did propose confiscation to the original importer, M/s. ASL, it failed to address the current owners, M/s. Cuddapah Spinning Mills, who were the actual owners of the confiscated machinery. Referring to the precedent set in M/s. Trilux Electric Company Pvt. Ltd., the Tribunal upheld the appellant's argument that confiscation without a clear proposal in the show cause notice to the current owners was not justified. Consequently, the appeal was allowed based on the established legal principles and citations. This detailed analysis of the judgment provides a comprehensive overview of the issues raised, the arguments presented, and the legal reasoning behind the Tribunal's decision.
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