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Issues Involved:
1. Confiscation of goods under Section 111(o) of the Customs Act, 1962 2. Imposition of fine and penalty under Sections 28 and 114A of the Customs Act, 1962 3. Use of imported raw material for domestic market instead of export Summary: The appeal stemmed from an Order-in-Original by the Commissioner of Customs, Madras-1, confiscating 9000 kgs. of Guaicol under Section 111(o) of the Customs Act, 1962, and imposing a fine of Rs. 2,10,000. The Commissioner also levied a penalty equal to the duty amount under Section 114A of the Customs Act, 1962. The appellant argued that the Guaicol was used in manufacturing a final product cleared with Central Excise duty, citing legal precedents to support a reduction in penalty. The appellant contended that the redemption fine imposed on unavailable goods was unjustified, referencing a Tribunal judgment. The Department argued that the imported raw material, under the DEEC Scheme for export obligations, was diverted to the local market due to non-fulfillment of export obligations. The appellant claimed they had time to meet export obligations and were entitled to sell in the domestic market. Upon review, the Tribunal found that no redemption fine could be imposed on unavailable goods. It acknowledged the diversion of raw materials to the domestic market but reduced the penalty from Rs. 13,29,073 to Rs. 4,50,000, considering the circumstances. The appellant was directed to deposit the balance amount of Rs. 3,50,000, with the penalty reduction based on the specific case details and legal precedents cited. This judgment highlights the application of legal provisions regarding confiscation, fines, and penalties under the Customs Act, 1962, in cases involving diversion of imported raw materials meant for export to the domestic market, emphasizing the need for compliance with export obligations and appropriate penalties for non-compliance.
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