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TMI Blog2014 (12) TMI 811X X X X Extracts X X X X X X X X Extracts X X X X ..... iolation of law made by the appellant. Also plea of appellant was that it was an actual user of imported goods and the export being done on "grain-to-grain" basis, there was no violation of law. 1.2 Department also alleged that the above 2496 MT of sugar exported were neither manufactured out of the imported raw sugar nor the export made on "Ton-to-Ton" basis. Therefore those were liable to confiscation and penalty. However, the goods not being physically available for confiscation, having left India, no redemption fine was imposed under Section 125 of Customs Act, 1962. Penalty of Rs. 1,00,00,000/- (Rupees one crore only) each were imposed on the appellant under Sections 114(i), 114 AA of Customs Act, 1962. Added to that, penalty of Rs. 10,00,000/- (Rupees ten lakhs only) was imposed on Shri Mukul Sharma, General Manager of appellant under Sections 114(i), 114 A of Customs Act, 1962. 2. On the aforesaid dispute, ld. Adjudicating Authority framed following issues and decided the same against the appellant :- "(1) Whether export of 2496 MTs of sugar effected by M/s. DSM (Dhampur Sugar Mills Ltd.) during the period July & August, 2010 was contrary to any legal proh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that when export obligation is discharged under "grain to grain" basis policy, that does not require export release order from the Chief Director (Sugar) of Sugar Directorate. 3.5 Further, attention was invited by appellant to Ministry of Finance - Circular No. 32/2010-Cus., dated 31-8-2010 to submit that the drawback sanctioning authority wrote to all Chief Commissioners stating that the Directorate of Sugar has requested that no export of sugar should be permitted against raw sugar imported under advance authorization scheme from 17-2-2009 to 30-9-2009 without release order of the Directorate of Sugar. But import of raw sugar being done by the appellant prior to that period, there was no necessity of release order from Sugar Directorate. 3.6 It was further submission on behalf of the appellant that the Directorate of Sugar considering the difficulties of the sugar manufacturers allowed the past exports to be regularized while issuing subsequent release order. Such regularization does not make the appellant liable to penalty under Customs Act, 1962. To submit so, attention to the last para of the letter dated 23-6-2011 of the Directorate of Sugar addressed to the Draw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dvance authorisation was exhausted by 2006-07 for which the sugar exported in July, 2010, was out of the sugar manufactured from indigenous raw material in the crushing season 2009-10. That proved that the exported sugar of 2496 MT was not out of raw sugar imported in 2005-06. Records of appellant also established that sugar exported in July, 2010 was not out of use of imported raw sugar. 4.2 Shri Batra, ld. DR submitted that the appellant has made confusion misconceiving that the appellant fulfilled the actual user condition for which no release order from the Directorate of Sugar was required. Inviting attention to para 2.7 of the show cause notice, he submits that the Chief Director (Sugar) vide his letter No. 25/03/2009/ES/276, dated 30-11-2010 (RUD) in the case of Simbhuli Sugar Mills, Hapur informed that the advance authorisation issued during the period from 21-9-2004 to 15.04.2008 were to be treated on "Ton to Ton" basis and not covered under "grain to grain" basis policy. Appellant's import period is within this range. Therefore in the case of import of raw sugar made during 21-9-2004 to 15-4-2008, release order for export was sine qua non. 4.3 Relying on the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... torate referred to above. 5. Heard both sides and perused the record. 6. It is an admitted fact on record that the raw sugar imported by the appellant against advance authorisation during the year 2005-06 was utilised prior to July/Aug., 2010 for which export of 2496 MT of sugar under 12 shipping bills bearing No. 3451, dated 22-7-2010, 3544 to 3554 all dated 22-7-2010 were made out of indigenously manufactured sugar. It is also an admitted fact that the export of 2496 MT of sugar was without any release order obtained by the appellant from Sugar Directorate. 7. While issuing letter dated 23rd June, 2011 (ref. page 53 of Appeal folder) by that Directorate it was stated therein that the appellant imported 48750 and 63,000 Ton of raw sugar under advance authorisation No. 510 151 260, dated 17-2-2005 and No. 510 153 112, dated 14-3-2005. Total export obligation to be discharged by the Appellant was 1,06,429/- Tons against the advance authorisation. The appellant fulfilled export obligation to the tune of 86,697 M.T. Accordingly 19,732 tons was pending to be exported. 8. Directorate of Sugar also stated that 2496 MT of sugar was exported by the appellant without ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. It was also pleaded that the appellant operated under actual user scheme. All such pleas are irrelevant and appellant was not an innocent but deliberately violated condition of advance authorisation. It may be stated that when the appellant was categorically found to have violated the export norm as has been stated by the Directorate of Sugar in its letter dated 23rd June, 2011, the inescapable conclusion that may be drawn is that 2,496 MT of sugar exported by the appellant was without release order and in contravention of the law. 11. In view of the default of the appellant to make export of sugar without release order, ld. Adjudicating Authority has correctly reached to the conclusion that the appellant is liable to penalty. He has imposed penalty of Rs. 1.00 crore each under Sections 114(i) and 114AA of Customs Act, 1962 respectively. Considering that profit was made by appellant utilising the import of raw sugar postponing its liability of exporting sugar manufactured out of such imported raw sugar, levy of penalty of Rs. 10.00 lakhs (Rupees ten lakhs) each under above two section respectively would be justified. It is ordered accordingly and aggregate penalty of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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