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2024 (9) TMI 74 - HC - Customs100% EOU - Demand of Customs duties from the appellant on yarns seized from Jay Krishna Sizers and Carewell Rayons Pvt. Ltd. and imposing penalty on the appellant - HELD THAT - It is not in dispute that the appellant company, which is part of the concerned group of company was involved in clandestine removal of imported PFY in the local market and as such there is a clear breach of Notification No. 59 of 1998 for manufacture of export goods by diverting the same in connivance with the brokers and the buyers and to obtain the sale proceeds in cash. Thus, no question of law, much less any substantial questions of law arise from the impugned order of the Tribunal. The Appeal therefore is accordingly dismissed.
Issues Involved:
1. Legality of demanding customs duties from the appellant on yarns seized from Jay Krishna Sizers and Carewell Rayons Pvt. Ltd. 2. Imposition of penalty on the appellant. Issue-Wise Detailed Analysis: 1. Legality of Demanding Customs Duties: The appellant, a 100% Export-Oriented Unit (EOU), was engaged in manufacturing twisted yarns and polyester filament yarns (PFY) and was permitted to import PFY duty-free for manufacturing export goods. The appellant was also allowed to deliver imported inputs to other EOUs. On 30.11.1999, officers from the Directorate General of Anti Evasion conducted an enquiry at the appellant's premises and seized 1800 kgs and 4842 kgs of PFY from Jay Krishna Sizers and Carewell Rayons Pvt. Ltd., respectively, due to lack of evidence of duty payment. A show-cause notice was issued to the appellant for the recovery of customs duty on these goods, alleging clandestine removal of PFY by the appellant. The Commissioner of Customs, in the order-in-original dated 08.03.2002, confiscated the seized goods under Section 111(J) of the Customs Act, 1962, and ordered the recovery of customs duties amounting to Rs. 1,36,030/- and Rs. 3,64,559/-, along with a penalty of Rs. 1,00,000/-. The CESTAT upheld this order, noting that the appellant had clandestinely removed duty-free imported goods for local sale, violating Notification No. 59/98. The appellant argued that the goods were provisionally released to Jay Krishna Sizers and Carewell Rayons Pvt. Ltd., making them the owners and liable for duty. However, the Tribunal found that the appellant, as the importer, was liable for the duty since the goods were imported duty-free by the appellant and no evidence suggested otherwise. 2. Imposition of Penalty: The appellant contended that the findings of the Adjudicating Authority and the Tribunal were based solely on the Director's statement without independent evidence. The appellant also argued that it was not given an option to redeem the seized goods, and the provisional release to the other concerns negated the appellant's liability for duty and penalty. The Tribunal, however, found sufficient evidence of the appellant's involvement in the clandestine removal of imported PFY, including statements from representatives of the involved parties and discrepancies in stock records. The Tribunal held that the appellant failed to rebut the charges of diversion and upheld the imposition of the penalty. Conclusion: The High Court, after considering the concurrent findings of the Adjudicating Authority and the Tribunal, found no grounds to interfere with the orders. The Court noted the clear breach of Notification No. 59/98 by the appellant and upheld the recovery of customs duties and the imposition of penalties. The appeal was dismissed, with the Court concluding that no substantial question of law arose from the Tribunal's order.
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