2011 (5) TMI 449 - AT - Customs

Demand and penalty - Import of primary gold - Notification No.177/94-Cus. dated 21.10.1994 - Shortage of primary gold - whether 9% wastage on export of studded jewellery was taken into consideration while arriving at the shortage of the gold - The statement prepared at the time of verification is about total import of gold, total export, gold recovered from dust, gold in stock and the finding and mountings in stock - Taking into consideration this quantity, the shortage of 8971.11 grams was found - In the memo prepared in respect of stock taking there is no mention of 9% wastage which is provided under the Notification - Therefore, the impugned order is set aside and the matter is remanded to the adjudicating authority to decide afresh after taking into consideration the conditions of the Notification - Thus, the appeals are disposed of by way of remand.

Summary

Issues:
1. Whether 9% wastage on export of studded jewellery was considered in calculating the shortage of gold.
2. Whether the appellants violated the conditions of the Notification by not filing periodical returns regarding stock to the Revenue.

Detailed Analysis:
Issue 1:
The case involved appeals by both the assessee and the Revenue against the same impugned order. The brief facts revealed that the appellant imported primary gold under a duty-free import Notification, intending to use it in manufacturing jewelry for export. However, during a stock-taking exercise, a shortage of 8971.11 grams of primary gold was discovered. The appellant contended that the adjudicating authority did not consider the 9% wastage allowance provided under the Notification for studded jewelry exported. The appellant cited relevant case law to support their argument. On review, the Tribunal found that the shortage was determined without factoring in the 9% wastage. Consequently, the Tribunal set aside the impugned order and remanded the matter to the adjudicating authority for a fresh decision, emphasizing the need to consider the Notification's conditions and the case law presented by the appellant.

Issue 2:
The Revenue's contention was that the appellants failed to submit periodical returns regarding stock to the Revenue, thereby breaching the Notification's conditions. The adjudicating authority had noted this failure in the adjudication order. Despite this, the Tribunal's focus was primarily on the calculation of the gold shortage and the consideration of the 9% wastage allowance. Since the main issue was the calculation methodology and not the failure to submit returns, the Tribunal's decision to remand the matter did not directly address the issue of non-compliance with filing requirements. As a result, the issue of the appellants' violation of the Notification by not filing periodical returns remained unresolved and was not the primary basis for the Tribunal's decision.

In conclusion, the Tribunal's judgment primarily addressed the calculation methodology of gold shortage concerning the 9% wastage allowance, leading to the remand of the appeals for fresh consideration by the adjudicating authority. The issue of non-compliance with filing periodical returns, raised by the Revenue, was not the central focus of the Tribunal's decision but remained outstanding for future consideration.