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Issues:
1. Confiscation of consignment under Customs Act, 1962 2. Duty confirmation under section 28 of the Customs Act, 1962 3. Penalty imposition under section 114A of the Customs Act, 1962 4. Failure to fulfill export obligation under DEEC scheme 5. Allegation of fraudulent export and violations of Foreign Exchange Law Confiscation of Consignment under Customs Act, 1962: The appeal was against the order-in-original where the Commissioner of Customs confiscated a consignment of Pseudoionone valued at Rs. 1,61,86,611/- under Section 111(o) of the Customs Act, 1962. The consignment was initially imported by one party, abandoned in Dubai, and re-imported by the current appellants. The Commissioner confirmed duty under section 28 of the Customs Act, 1962, and imposed penalties under section 114A. The issue revolved around the confiscation and duty demand related to the non-fulfillment of export obligations. Failure to Fulfill Export Obligation under DEEC Scheme: The case highlighted that the appellants failed to utilize the duty-free imported material for the manufacture of export goods as required under the DEEC scheme. The importer did not request an extension for the export obligation period, leading to the confiscation of goods and duty demand. The only surviving allegation against the importer was the non-utilization of imported goods for export product manufacturing, as per the DEEC scheme. Allegation of Fraudulent Export and Violations of Foreign Exchange Law: The show cause notice mentioned fraudulent export of Pseudoionone 90% with inflated values, violating Foreign Exchange Law. However, the Commissioner ruled that the appellants were not liable for penal action under section 114 of the Customs Act. The judgment concluded that there was no fraud in the export transaction, as there was no cross-appeal from the revenue on this aspect, establishing finality on this issue. Judgment Analysis: The appellate tribunal found that the confiscation and duty demand were unjustified, considering the circumstances. The detention and seizure of the consignment were deemed illegal, as the failure to complete export obligations was not foreseeable at the time of the initial investigation. The tribunal directed the release of the material to the importers, allowing them to seek an extension for export obligations. If the extension was not obtained within six months, duty recovery could proceed. The judgment set aside the impugned order, emphasizing the need for fairness and a chance for the appellants to comply with export obligations. This detailed analysis of the judgment addresses the issues of confiscation under the Customs Act, failure to fulfill export obligations, and allegations of fraudulent export, providing a comprehensive overview of the tribunal's decision and reasoning behind setting aside the original order.
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