2017 (11) TMI 1186 - AT - Customs

N/N. 12/2012 - manufacture of gold bars of purity of 99.5% and above - Held that - it has been held by the adjudicating authority that the goods seized are manufactured out of the goods imported by the appellant. Therefore, as goods imported has been used for intended purpose, in that circumstances, the appellant has complied with the condition of the N/N. 12/2012 - demand set aside. Neither during the investigation nor at the time of transportation the goods, the appellants were carrying proper documents for transportation of the said goods. As the appellant is not maintaining the proper records of the imported goods including sl. number, date etc. and not maintaining the record of intended use of the said goods, in that circumstances, the goods are liable for confiscation in terms of Section 111(o) of the Customs Act, 1962. Appeal allowed in part.

Summary

Issues:
Appeal against confiscation of goods, demand for differential duty, redemption fine, and penalties imposed on the appellants.

Confiscation of Goods and Demand for Differential Duty:
The main appellant, engaged in manufacturing gold bars, imported two consignments of gold. During a physical verification, it was found that one consignment had a shortage of 5732.43 Kg. The appellant was alleged to not maintain proper records under the Customs rules, leading to a demand for differential duty. The adjudicating authority confirmed the duty demand, held the goods liable for confiscation, and imposed penalties. The appellant contended that they immediately converted imported gold into 99.5% purity and transferred it to their head office, maintaining proper records. The appellate tribunal observed that the goods seized were manufactured from the imported gold, used for the intended purpose, and set aside the duty demand.

Confiscation of Goods and Redemption Fine:
The appellants failed to carry proper documents during transportation and did not maintain records of the imported goods. As a result, the goods were held liable for confiscation under the Customs Act. The tribunal upheld the confiscation but reduced the redemption fine imposed on the appellants.

Reduction of Penalties:
The tribunal reduced the penalties imposed on the appellants, including the Managing Director and Directors of the company. The penalty on an employee was dropped as he was working on the instructions of the company directors. The final order set aside the duty demand, upheld the confiscation of goods with a reduced redemption fine, and decreased the penalties imposed on the appellants.

This judgment highlights the importance of maintaining proper records in customs matters, the consequences of failing to do so, and the tribunal's authority to reduce penalties based on individual roles and responsibilities within a company.