9911796707
TMI Blog2006 (9) TMI 368X X X X Extracts X X X X X X X X Extracts X X X X ..... . of bill of entry no. and date Qty. shown in bill of entry Quantity found at the time of verification 1. Ex. Bond B/E Sl. No. 134(Sea)FEPZ dt. 26-9-2000 147 bales Raw Silk 101 bales. 2. Ex. Bond B/E Sl. No. 146(Sea)FEPZ dt. 18-10-2000 150 bales Raw Silk 150 bales. 3. Ex. Bond B/E Sl. No. 124(Sea)FEPZ dt. 12-9-2000 150 bales Raw Silk 21 bales. 4. Ex. Bond B/E Sl. No. 114(Sea)FEPZ dt. 24-8-2000 200 bales Raw Silk 67 cartons. 5. Falta Duty form dt. 9-8-2000 1964.8 5Kgs Twisted silk 1299.520 1.3 Certain goods cleared on Advance Licences were sent to Varanasi, a subsidiary manufacturer, for conversion/manufacture. On examination, other goods were released, however, it was found that total 297 bales of mulberry raw silk were imported on two Advance Licences both dated 21-2-00 and this consignment was cleared on a Bill of Entry on 26-9-00 and 18-10-00 and kept in the Bonded Warehouse of the appellant company in Falta Export Processing Zone, subsequently, Home Consumption Bills of Entry were filed and the goods were handed over to the supporting manufacturer M/s Eastern Enterprises Ltd. (EEL for short). This was for conversion of the raw silk into fabrics. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for home consumption against Ex-Bond bills of entry having serial numbers 134(Sea) FEPZ dated 26-9-2000 and 147(Sea) FEPZ dated 19-10-2000 (respectively) but for the exemption contained in notification no. 31/97-Cus. shall not be realised from the importer together with interest @ 24% per annum from the date of clearance of the same in terms of condition no. (ii) of the said notification land in terms of the bond executed by the importer at the time of clearance. (ii) Why 46 bales of mulberry raw silk yarn weighing 2791 Kgs, valued at Rs. 44,54,805/- shall not be held liable to confiscation, under Section 111(o) of the Customs Act, 1962 for contravention of the provisions of the EXIM policy read with Para 7.27 of the Hand Book of Procedures read with Section 3 of the Foreign Trade (Development and Regulation) Act, 1992 and notification no. 31/97-Cus., as amended, and as the said 46 bales have been sold in the open market, an amount of Rs. 44,54,805/- being the value of the same, shall not be recovered from them. (iii) Why the seized 251 bales of mulberry raw silk yarn weighing 15099 Kgs. valued at Rs.2.14 crore shall not be confiscated under section 111(o) of the Custom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... free prior to fulfilment of export obligation, the officers of Customs (Preventive) Division, Varanasi intercepted both the offending consignments on 9-11-2000 lying in the premises of M/s. Eastern Enterprises Ltd. at CK-23/6, Rani Kuan Chowk, Varanasi which was neither their manufacturing unit nor was any supporting manufacturer as evidenced from the record. On the point of verification on the said date, it was established beyond doubt and also admitted by the noticees and supported by the sale vouchers and other documents as discussed that 46 Bales out of the 297 Bales covering both the consignments were already diverted and sold in the open market. The balance 251 Bales were detained by the customs authorities and the statements of noticees No. 4 & 5 taken u/s 108 of the Customs Act, 1962 recorded on various dates confirmed the department's contention that even the balance 251 Bales were meant for sale. 46. At the time of de novo proceedings the Noticee No.(1) only on 10-3-2002 has come out with some fresh evidence to the effect that they have completed their export obligation against both the Advance Licences in full and have obtained the discharge of export obligation Ce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustoms Act, 1962. Both M/s. ESI Ltd. and M/s. Eastern Enterprises Ltd. and Shri Hah Prasad Agarwal being the Director of M/s. Eastern Enterprises Ltd. as well, by virtue of their active involvement on diversion of duty-free materials and sale of a part of the same as discussed in the preceding paragraphs have rendered themselves liable to penal action under Section 112(a) & (b) of the Customs Act, 1962." And held that the entire consignment of 297 bales were liable to confiscation and offered a redemption fine of Rs 40.00 lakhs for the same and imposed penalty amounting to Rs 4.00 lakhs on ESI under Section 112(a) and EEL Rs 4.00 lakhs under Section 112(b) and penalties of Rs 2.00 lakhs on Hari Prasad Agarwal under Section 112(b) and refrained from imposing any personal penalty on other notices. Hence the present appeals. 3.1 The Notice relies on the statement of Mr. Ram Chandra Sharma, Authorised Signatory of ESI Ltd. to the effect that 147 and 150 bales were imported against the said Advance Licences and DEECs supplied to EEL, who manufactured silk articles on job work, as also the receipt of resultant manufactured product out of the subject consignments of raw silk yarn w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sales of yarn was to weavers for weaving of silk fabrics for conversion into silk articles. The silk weavers industry is disorganized cottage/small scale industry spread in and around Varanasi. To keep the effective control on such spread out industry who ought to be handed over the silk yarn for weaving, a trade practice appears to have developed, recognizing 'master weavers' status in the industry. The ld. Advocate relied upon the decision of Shree Agencies [1977 (1) E.L.T. (J168) (S.C.), a five Member decision of the Apex Court, in the case of cotton yarn merchant who was showing sale of such yarn & thereafter purchased fabrics woven from such yarn, the Apex Court held that the Agent viz. Shree Agencies is a manufacturer of the goods and did not accept them as trading in yarn. In this case also, the yarn has been sold to various weavers as there is no evidence contrary to this claim, thereafter silk fabrics have been procured and then articles fabricated and exported. There is no investigation or enquiries made as to how the fabrics and the silk articles were procured, which have been exported. We have to accept the plea they have been procured from the weavers and the goods the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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