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TMI Blog2016 (5) TMI 599X X X X Extracts X X X X X X X X Extracts X X X X ..... be available when a DTA unit imports goods and routes it through SEZ/FTWZ for self-consumption i.e. in the nature of stock transfer from SEZ/FTWZ” - Held that:- the Board through circular 44/2013, dated 30-12-2013 has clarified that the benefit of the notification is not available to the goods which are for self-consumption and consequently SAD is attracted. In the instant case, the goods were for self-consumption and condition of the notification was not satisfied. As such the provisions of Section 111(o) get attracted rendering the liable to confiscation and the applicant/co-applicant liable to penalty under Section 112. The goods are not available for confiscation but the applicant/co-applicant are liable to penalty under Section 112. As there was no misstatement, fraud, etc., neither Section 114A nor Section 114AA is attracted. Quantum of penalty under Section 112 - Held that:- the opening paragraph of the Board’s circular confirms the claim of the applicant that there was confusion about the applicability of SAD. This fact will have a bearing on the quantum of penalty. The immunities to the applicant and the co-applicant are granted under Section 127H(1) of the Act. Their a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otification No. 45/2005-Customs, dated 16-5-2005 as RIL presumed that since goods were imported for own consumption and not for trading, VAT/Sales tax would not be applicable on such imports. Once the goods were purchased from warehouse/site of their foreign vendors it became M/s. RIL property and those goods were not sold at any point of time but consumed by them in their factory as raw material for manufacture of their finished goods. Thus M/s. RIL were importer from beginning till its clearance to factory. In this case there was no ambiguity that M/s. RIL were importer from the stage when goods left the supplier s premises till the goods reached their factory. Further the goods cleared by M/s. RIL through M/s. Arshiya FTWZ were for own consumption, i.e., for use as raw material for their finished product. It was not amounting to sale and did not come under the purview of Maharashtra Sales Tax or VAT Act/CST Act and so, such clearances were treated as exempt from payment of sales tax or value added tax and were therefore, hit by the proviso to Notification No. 45/2005-Customs, dated 16-5-2005, as amended. As such, when the goods were not meant for sale but for own consu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est at the appropriate rate on the said amount of SAD [mentioned at (iii) above] should not be charged and recovered from them for non-payment of SAD within the period specified under Section 28AA of the CA, 1962 and why the amount of ₹ 38,60,394/- paid by them, during investigation should not be appropriate against the interest payable; (v) The goods amounting to ₹ 38,51,17,002/- as detailed in Annexure A to the show cause notice should not be held liable to confiscation under Section 111(o) of the CA, 1962; (vi) Penalty should not be imposed upon them under the provisions of Section 112 of the CA, 1962; (vii) Penalty should not be imposed upon them under Section 114A of the CA, 1962. (viii) Penalty should not be imposed upon them under Section 114AA of the CA, 1962. 3.2 Shri Rajesh Pandey, Director of M/s. RIL was also required to show cause to the adjudicating authority as to why penalty should not be imposed upon him under Section 112 114AA of CA, 1962. 4.1 In their application, the applicant have stated that the impugned goods had been captively used in the manufacturing activity and the final products were sold and hence, the question of co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wala submitted that issue was about applicability of SAD. During the relevant period there was confusion with regard to this issue and even the Customs authorities were not clear about this issue at the time of the assessment. Had the Customs authorities advised the applicant to pay SAD they would have discharged same. CBEC had issued clarifications that SAD is applicable but the Customs authorities, at the time of assessment, did not advise accordingly. It was a matter of interpretation and there was no intention on the part of the applicant to evade duty. The applicants have already paid the applicable duty and interest and therefore the ld. Advocate prayed for a lenient view while imposing penalty. He also requested for immunity from prosecution. 7.3 On a query from the Bench that in an earlier case of the applicant, the Bench had imposed penalty and therefore the present application could not entertained because of the bar under Section 127L of the Customs Act, the ld. Advocate replied that in the earlier case, order was passed after present application was received in the Bench. Going by the words in Section 127L the bar applies only if the application is received after ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Bar on subsequent application for settlement in certain cases . - (1) (i) Where an order of settlement provides for the imposition of a penalty on the applicant under section 127B for settlement on the ground of concealment of particulars of his duty liability; or ___________________________________________________________ ___________________________________________________________ Then such person shall not bo entitled to apply for settlement under section 127 B in relation to any other matter. [emphasis added] The words and phrases used in the Section 127L are shall not be entitled to apply . The bar is on applying subsequent to order of settlement imposing the penalty. The applicant s case is not clearly not hit by this bar as in their case the present application has been filed before the order imposing penalty was passed. Thus, the Bench s earlier order allowing the application to be proceeded with is unaffected. The Bench now proceeds to decide other issues. 9.2 The applicant have already admitted and paid the duty and interest demanded by the revenue in the show cause notice. They have, however, requested for immunity from penalty and prosecution ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bility subsists on this count. Penalty : (i) A penalty of ₹ 1,80,000/- (Rupees One Lakh Eighty Thousand only) is imposed on the applicant. Immunity from penalty in excess of this amount is granted. (ii) A penalty of ₹ 20,000/- (Rupees Twenty Thousand only) is imposed on the co-applicant. Immunity from penalty in excess of this amount is granted. Prosecution : Complete immunity from prosecution under Customs Act, 1962 is granted to both the applicant and the co-applicant in so far as this case is considered. 10.2 The above immunities to the applicant and the co-applicant are granted under Section 127H(1) of the Act. Their attention is also invited to the provisions of sub-section (2) and (3) of Section 127H ibid. This order shall be void and immunities withdrawn if the Bench, at any time finds that the applicant had concealed any particular material from the Commission or had given false evidence or had obtained this order by fraud or misrepresentation of facts. 10.3 A copy of this order is given to the applicant/co-applicant and Jurisdictional Commissioner for their use in the implementation of this order. No one should use this order in any other man ..... X X X X Extracts X X X X X X X X Extracts X X X X
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