2010 (2) TMI 568 - AT - Customs

High sea sale - claimed benefit of exemption in terms of Notification No. 51/2000-Cus.- notification is meant for importation of materials which are required to be utilized to fulfill the export obligation - sold the goods to various customers and did not fulfill the export obligations - no evidence is available to show that high sea sale was not genuine Held that - order of the Commissioner in respect of appellant is set-aside and matter is remanded to Commissioner for de nova adjudication leaving all the matters open

Summary

Issues:
1. Alleged misuse of exemption notification for imported goods.
2. Involvement of appellants in diversion of goods and misuse of benefits.
3. Role of Shri Vijay Navani in assisting with importation and clearance of goods.
4. Commissioner's findings and penalties imposed on the appellants.

Analysis:
1. The case involved the misuse of an exemption notification for imported goods by M/s. Silicon Industries (I) Limited (SIIL) for not fulfilling export obligations. Investigations revealed that goods were sold to customers without meeting export obligations, leading to a demand for customs duty and penalties imposed on SIIL and the appellants.

2. The appellants, Shri N.K. Didwania and Shri Ashok Desai, were accused of creating artificial sales to SIIL, resulting in the misuse of the exemption notification. Arguments were presented regarding the genuineness of high sea sales and lack of evidence to prove the allegations against the appellants. The Commissioner's order was scrutinized, and it was concluded that penalties imposed on these appellants could not be sustained due to insufficient evidence.

3. Shri Vijay Navani's role in assisting with advance licenses, transportation, and disposal of goods was questioned. The Commissioner relied on statements from individuals claiming Navani's involvement, but the specifics of his role in importation and diversion of goods at Kandla Port were not adequately addressed. The case was remanded for fresh adjudication to consider Navani's involvement in detail.

4. The Commissioner's findings on the involvement of the appellants and Navani were analyzed, highlighting discrepancies in evidence and lack of concrete proof of their awareness of the diversion of goods. Ultimately, the appeals of Shri N.K. Didwania and Shri Ashok Desai were allowed, and the order concerning Shri Vijay Navani was set aside for further examination. The matter was remanded for a new adjudication, ensuring all aspects are considered thoroughly.