2019 (5) TMI 333 - AT - Customs

100% EOU - cut flowers cleared to domestic market pending the permission from development commissioner - violation of terms of the B-17 Bond - case of appellant is that the confirmation of demand is without authority of law as no Section of Custom Act or Central Excise Act, has been invoke while confirming demand of duty - time limitation - HELD THAT - The SCN is issued in terms of the B-17 Bond executed by them with the customs authorities. We find that in terms of the Bond provisions of recovery of interest and penalty are available. Therefore the SCN or the Order is not vitiated by the non-mentioning the particular authority in the form of Section or Rule. Non-quoting or mis-quoting of the provisions of law will not make Show Cause Notice or adjudicating order invalid or illegal. The Appellants contention in this regards is not acceptable for the reason that the Show Cause Notice issued for enforcement of the conditions of Bond, the Show Cause Notice is not time barred. Imposition of penalty - HELD THAT - The issue was about the interpretation of provisions of custom Act, Exim Policy and the notification issued thereof. Learned Commissioner has dropped substantial portion of the demand as per the directions of CESTAT and on the basis of permission granted by the Development Commissioner at a later date - penalty set aside. Appeal disposed off.

Issues:
1. Confirmation of demand without authority of law.
2. Barred by limitation.
3. Imposition of penalty under Section 112(a) of Customs Act.
4. Duty liability on inputs for production of non-excisable goods.
5. Penalty imposition without seizure of goods.

Analysis:

1. Confirmation of demand without authority of law:
The appeal challenged the confirmation of demand without invoking any specific section of the Custom Act or Central Excise Act. The appellants argued that the Show Cause Notice lacked legal authority. However, the Tribunal upheld the demand, stating that the notice was issued based on the B-17 Bond executed by the appellants with customs authorities. The Tribunal clarified that non-quoting or misquoting of legal provisions does not invalidate the notice or the adjudicating order.

2. Barred by limitation:
The appellants contended that the Show Cause Notice was time-barred due to the issuance of six different notices for the same period earlier. The Tribunal rejected this argument, stating that the notice was issued for the enforcement of bond conditions and was not time-barred. Citing precedent cases, the Tribunal upheld the demand of duty along with interest.

3. Imposition of penalty under Section 112(a) of Customs Act:
Regarding the imposition of penalty under Section 112(a) of the Customs Act, the appellants argued that such penalty is not imposable without confiscation of goods under Section 111. The Tribunal agreed with this argument and set aside the penalty imposed on the appellants.

4. Duty liability on inputs for production of non-excisable goods:
The Tribunal found that the appellants had utilized imported inputs for the production of cut roses cleared in the domestic market without permission, leading to a duty liability of a specific amount. The Tribunal upheld this duty liability along with interest, as per the provisions of the relevant notification.

5. Penalty imposition without seizure of goods:
In the case of penalty imposition on Shri Dinesh Bheda, the Tribunal noted that there was no seizure of goods, and hence, the provisions of Section 112 were not applicable. The Tribunal ruled that there was no need to impose any penalty on Shri Dinesh Bheda, as substantial portions of the demand were dropped based on directions from CESTAT and permissions granted by the Development Commissioner at a later stage.

In conclusion, the Tribunal held that the appellants were required to pay the duty amount along with interest, while setting aside the penalty imposed on them. The appeal filed by Shri Dinesh Bheda was allowed, and the order was pronounced on a specific date.

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