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2016 (9) TMI 522 - AT - CustomsConfiscation - gold - shortages found during stock-taking - goods not available for confiscation - fine in lieu of confiscation - recovery of customs duty - imposition of penalty - Section 111, 112A, 125 of the Customs Act, 1962 - Notification No.117/94-Cus dated 21/10/1994 - SEEPZ unit - Held that - the decision of the Apex court in the case of Weston Components Ltd. v. CC, New Delhi 2000 (1) TMI 45 - SUPREME COURT OF INDIA does not apply here. The confiscation always presumes availability of goods and presumption normally is that goods have been seized and thereafter the proceedings would culminate into confiscation or release. Confiscation would mean that seized goods become the property of the Government and the party to whom it is ordered to be released on payment of fine, will have to pay fine and redeem the goods. When the goods have been diverted and not released on execution of bond with conditions, the question of confiscation of the same does not arise since goods have already become someone else s property. Appeal disposed off - decided against Revenue.
Issues Involved:
1. Liability for confiscation and imposition of redemption fine under Section 125 of the Customs Act, 1962. 2. Applicability of the Supreme Court's judgment in Weston Components Ltd. to the case at hand. 3. Relevance of the bond executed under Notification No. 177/94-CUS dated 21/10/1994. Detailed Analysis: 1. Liability for Confiscation and Imposition of Redemption Fine: The appellant, M/s. Jewel Tech India Pvt. Ltd., engaged in manufacturing jewelry in SEEPZ, imported gold and diamonds duty-free under Notification No. 177/94-CUS for export purposes. During a stock inspection, a shortage of 13,122.17 grams of gold was detected, valued at ?54,76,406/-. Consequently, a show-cause notice was issued to recover Customs duty and impose a penalty under Section 112A of the Customs Act. The adjudicating authority confirmed the demand for Customs duty and ordered confiscation of 14,431.59 grams of gold valued at ?60,22,879/-. However, the goods were not available for confiscation, and no fine was imposed in lieu of confiscation under Section 125 of the Customs Act. 2. Applicability of the Supreme Court's Judgment in Weston Components Ltd.: The Revenue argued that, based on the Supreme Court's decision in Weston Components Ltd., even if the goods were not available, they were still liable for confiscation, and a redemption fine should have been imposed. The Tribunal in Bimal Kumar Mehra Vs. CC (Import), Mumbai supported this view, stating that non-availability of goods does not prevent the imposition of a redemption fine if the goods were cleared against a bond. However, the Tribunal also noted that in the absence of a bond specifying the conditions for provisional release, the imposition of a redemption fine is not justified. 3. Relevance of the Bond Executed Under Notification No. 177/94-CUS: The Tribunal examined the relevance of the bond executed under the said notification. The bond required that duty-free imported goods be used for manufacturing finished products for export. If the goods were not used as specified, the unit was liable to pay duty, value, penalty, or other charges. The Tribunal referenced several cases, including Bhagyanagar Metals Ltd. Vs. CCE, Hyderabad-II and SB&T International Ltd., where it was established that redemption fines could not be imposed in the absence of a seizure or provisional release of goods under a bond. The Tribunal concluded that the terms of the bond are crucial for determining the applicability of confiscation and redemption fines. Conclusion: The Tribunal found that the facts of the case did not align with the precedent set by the Supreme Court in Weston Components Ltd. The bond executed by the appellant did not specify conditions for provisional release, and the goods were not seized or provisionally released under such a bond. Therefore, the imposition of a redemption fine was not justified. The appeal of the Revenue was rejected, and the decision of the adjudicating authority was upheld. Pronouncement: The judgment was pronounced in court on 24/08/2016.
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