2017 (4) TMI 1200 - AT - Customs

100% EOU - benefit of N/N. 52/2003-Cus dated 31.03.2003 - demand on the ground that appellant have not fulfilled their export obligation - appellant were engaged in the manufacture and export of stone studded gold jewelry and was allowed the duty free imports of the raw materials, along with other goods - Held that - the appellant could not produce the documents before the adjudicating authority, though a request was made to the adjudicating authority to procure the said documents from the Port of export in his official capacity and to verify the said fact from the corresponding concerned office. The appellants now have the documents in their custody - matter in respect of the said demands needs to be remanded once again for verification of the documents - appeal allowed by way of remand.

Summary

Issues:
1. Confirmation of duties against M/s. Vaibhav Global Limited along with imposition of penalty.
2. Non-fulfillment of export obligation leading to demand of customs duty.
3. Confirmed demand of duty due to inability to produce export-related documents.
4. Excess wastage of gold jewelry leading to confirmation of duty.
5. Confirmation of duty on re-import of jewelry due to lack of export documents.
6. Imposition of penalty on the Director and employee.

Analysis:
1. The judgment deals with the confirmation of duties against M/s. Vaibhav Global Limited along with penalties imposed on individuals. The impugned order passed by the Commissioner confirmed duties and penalties against the company and its Managing Director and an employee. The Tribunal noted that all three appeals arose from the same order.

2. The issue of non-fulfillment of export obligation resulting in the demand of customs duty was raised. The company, a 100% EOU engaged in the manufacture and export of gold jewelry, faced allegations of not meeting export obligations. The proceedings initiated through a show cause notice proposed a demand of around ?6 crores in customs duty.

3. The confirmation of duty was based on the inability of the appellant to produce export-related documents for four consignments during de-novo adjudication. The appellant claimed that the documents were seized during a raid, and despite efforts to procure them, the adjudicating authority did not accede to the request. The Tribunal ordered a remand for verification of the newly procured documents.

4. Another issue involved excess wastage of gold jewelry beyond the standard 9%, leading to the confirmation of duty. The appellant argued that the excess wastage was due to design and craftsmanship variations, and the imported goods were fully utilized in manufacturing. The Tribunal set aside the demand related to excess wastage.

5. The confirmation of duty on re-import of jewelry was due to the lack of documents proving re-export after repairs. The appellant acknowledged the absence of such documents, leading to the confirmation of the duty. The Tribunal upheld this decision.

6. Regarding the penalty imposed on the Director and employee, the Tribunal found no justification for penalties due to the majority of demands being set aside. The penalties were based on technical grounds of non-production of export documents, which were now available. Therefore, the penalties were set aside, and the appeals were allowed.

Overall, the Tribunal remanded certain issues for further verification, set aside demands related to excess wastage, confirmed duty on re-import due to lack of documents, and annulled penalties based on technical grounds.