2017 (6) TMI 1054 - AT - Customs

Confiscation of Gold Bars - penalty - jurisdiction within the SEZ area to initiate the proceedings under the Customs Act, 1962 - Held that - in the case of Meenakshi International 2016 (11) TMI 851 - CESTAT NEW DELHI , the Tribunal has allowed the appeal in favor of the appellant with consequential benefits, holding that the Customs did not have jurisdiction within the SEZ area established under SEZ Scheme by Ministry of Commerce, Government of India and accordingly, proceedings cannot be initiated for confirmation of the adjudged demand - in the present case, since the seized goods were intercepted and taken possession at gate No.1 within the SEZ area, on this ground also, the proceedings initiated by the Customs will not hold good for confiscation of goods and imposition of penalties. - appeal allowed - decided in favor of appellant.

Issues:
1. Jurisdiction of Customs Department within SEZ area for confiscation and penalties.
2. Applicability of relevant judgments to the case.
3. Confiscation of gold bars, imposition of penalties, and redemption fine.

Jurisdiction of Customs Department within SEZ area for confiscation and penalties:
The case involved an appeal against an order passed by the Commissioner of Customs, New Delhi, regarding the confiscation of gold bars from a vehicle within a Special Economic Zone (SEZ). The appellant argued that the Customs Department lacked jurisdiction within the SEZ area to initiate proceedings under the Customs Act, 1962. The appellant relied on various judgments to support this claim. The Tribunal analyzed the jurisdictional issue, citing the decision in Meenakshi International case where it was held that Customs did not have the authority to confiscate goods within the SEZ area. The Tribunal concluded that the Customs proceedings were beyond jurisdiction, setting aside the impugned order and allowing the appeal.

Applicability of relevant judgments to the case:
The appellant presented several judgments to support their argument against the confiscation of gold bars and imposition of penalties. The Tribunal specifically referred to the Meenakshi International case, where it was established that Customs did not have jurisdiction within the SEZ area for confiscation. The Tribunal emphasized that the principle decided in the Meenakshi International case applied directly to the facts of the present appeals. It was clarified that since the seized goods were intercepted within the SEZ area, the Customs proceedings for confiscation and penalties were deemed invalid. The Tribunal upheld the relevance of the Meenakshi International judgment in determining the jurisdictional issue in the current case.

Confiscation of gold bars, imposition of penalties, and redemption fine:
Regarding the confirmation of duty demand, the appellant did not contest the liability and had already deposited the duty, interest, and a portion of the penalty. However, the appeal focused on challenging the confiscation of gold bars, imposition of penalties, and redemption fine. The respondent argued that the goods were intercepted at the SEZ gate, indicating an intention to transport them outside the SEZ area. The Tribunal, after considering both sides, concluded that the Customs proceedings were not valid within the SEZ area. Consequently, the impugned order was set aside to the extent of confiscation of gold bars, gold jewelry, vehicle, and imposition of redemption fine and penalties on the appellants. The appeals were disposed of accordingly.

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