2004 (6) TMI 123 - AT - Customs

2022 (7) TMI 1061 - AT

Issues Involved:
1. Demand of duty and interest.
2. Confiscation of imported and indigenously procured capital goods.
3. Confiscation of seized goods and trucks.
4. Imposition of personal penalties.
5. Allegation of failure to meet export obligations.

Detailed Analysis:

1. Demand of Duty and Interest:
The adjudicating authority demanded a duty of Rs. 3,97,08,666/- from M/s. PML Industries Ltd. under Rule 9(2) of the Central Excise Rules, 1944 read with Section 11A(2) of the Central Excise Act, 1944. Additionally, interest on the duty amount at 20% per annum was directed under Section 11AB of the Central Excise Act, 1944 read with Notification No. 34/96-C.E. (N.T.), till the amount is paid.

2. Confiscation of Imported and Indigenously Procured Capital Goods:
The Commissioner confiscated duty-free imported capital goods valued at Rs. 26,31,93,429/- under Section 111(o) of the Customs Act, 1962 but allowed redemption on payment of a token fine of Rs. 10,00,000/-. Similarly, indigenously procured capital goods valued at Rs. 81,31,335/- were confiscated under Rule 9(2) read with Rule 173Q of the Central Excise Rules, 1944, with a redemption fine of Rs. 50,000/-.

3. Confiscation of Seized Goods and Trucks:
The order stated that FBBM weighing 38,884 kgs. and 85,527 kgs., valued at Rs. 55,36,290/-, was liable for confiscation under Rules 9(2), 151, and 226 read with Rule 173Q of the Central Excise Rules, 1944. However, since the goods were released provisionally, the bond was enforced, and Rs. 10,00,000/- was appropriated from the bank guarantee. Additionally, trucks were liable for confiscation under Section 115 of the Customs Act, 1962 but were released provisionally, leading to the enforcement of bonds and appropriation of Rs. 60,000/- each from the bank guarantees.

4. Imposition of Personal Penalties:
Personal penalties were imposed on various entities and individuals:
- Rs. 4,00,00,000/- on M/s. PML Industries Ltd. under Section 11AC of the Central Excise Act, 1944.
- Rs. 10,00,000/- on M/s. PML Industries Ltd. under Section 112(a) of the Customs Act, 1962.
- Rs. 5,00,000/- each on M/s. Agricom Foods Pvt. Ltd., M/s. Allana Investment and Trading Co., and M/s. Frigario Conserva Allana Ltd. under Rule 209A read with Rule 225 of the Central Excise Rules, 1944.
- Rs. 5,00,000/- on M/s. Allanasons Ltd. under Rule 209A read with Rule 225 of the Central Excise Rules, 1944.
- Rs. 1,00,000/- on M/s. Frigorifico Allana Ltd. under Rule 209A read with 225 of the Central Excise Rules, 1944.
- Rs. 5,00,000/- on Shri A.S. Bindra, Managing Director of M/s. PML Industries Ltd. under Rule 209A of the Central Excise Rules, 1944.
- Rs. 50,000/- on Sh. Afzal Latif, Authorised Representative of M/s. Agricom Foods Pvt. Ltd., M/s. Allana Investment and Trading Co., and Frigario Conserva Allana Ltd. under Rule 209A of the Central Excise Rules, 1944.
- No penalty was imposed on M/s. Shallu Enterprises and M/s. S.K. Enterprises.

5. Allegation of Failure to Meet Export Obligations:
The proceedings originated from the allegation that M/s. PML Industries Ltd. failed to meet its export obligation as a 100% EOU and sold part of its goods domestically. The appellant contended that its export obligations were met through arrangements with other firms, which procured cattle for slaughtering, and the processed meat was supplied to these parties for export. The Development Commissioner, Noida Export Processing Zone, accepted the performance of export obligation, which contradicted the findings of the impugned order. The Tribunal noted that the customs authorities should not undertake parallel proceedings on export obligations, which are under the purview of the DGFT.

Conclusion:
The Tribunal found the findings in the impugned order unsustainable. The duty demands, confiscations, and penalties against the appellants were set aside, allowing the appeals with consequential relief. The Tribunal emphasized that the customs authorities should refrain from investigating export obligations, which should be determined by the DGFT.

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