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TMI Blog2008 (1) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... [Order]- 1. Appellant is a Public Sector Undertaking of the Government of India. Under the Export and Import Policy of the Government, as framed from time to time, Schemes were formulated whereby jewellery manufacturing units were permitted to import primary gold of 0.995 fineness for the purpose of manufacture and export of gold jewelery, subject to certain value addition norms. Such units were permitted to set up manufacturing facilities within the specified Export Processing Zones (for short "EPZ") or in Special Export Oriented complexes subject to these units being 100% Export Oriented Units (in short "EOUs"). 2. Pursuant to the above Scheme, a number of manufacturers/exporters set up units in the Noida EPZ. Under the Scheme, a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our units. For the years 1991-96, the gold was imported for EPZ at Jhandewalan and 1996-98 for the EPZ at Noida. 4. The Commissioner of Excise and Customs confirmed the demand for the gold imported in the year 1992-97 at Rs. 34,80,000/-, Rs. 29,61,750/-, Rs. 36,74,598.35 p. and Rs. 29,00,000/- relating to the gold supplied to M/s. Amit Jewellers, M/s. Goldex, M/s. Zavarat Overseas and M/s. Unique Jewellers respectively. Four separate adjudication orders were passed and Commissioner also imposed penalty of Rs.5,00,000/-, Rs.2,00,000/-, Rs.10,00,000/- and Rs.2,00,000/- respectively. For Jhandewalan EPZ, the duty demand of Rs.7,07,01,428/- was dropped by the Commissioner, against which the Department filed appeal before the Tribunal. Appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... made liable for payment of customs duty in the event the unit commits a breach of its obligation to export the jewellery made from such gold, and thereby allow all such defaulting units to escape scot free of any liabilities. Whether the findings by the Hon'ble Tribunal that "the scheme provides for issuing of gold by M/s. MMTC to the unit only on the strength of Bill of Entry filed by the unit and duly assessed", does not lead to the conclusion that once the gold is issued to a unit, the liability for payment of duty in the event of default gets automatically transferred to the unit to whom the said gold is issued. Whether there can be any requirement read into the REP Circular No. 22/98, as held so by the Hon'ble Tribunal, namely that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... C with the breach of the scheme or the conditions of the notification, and in the absence of any finding that the import of gold was made pursuant to a conspiracy to illegally divert the gold. Whether in the facts of the present case, any penalty could at all be imposed, in view of the decision of the Hon'ble Supreme Court in Indian Oil Corporation Ltd. v. Chief Inspector of Factories (1999 (113) E.L.T. 761), wherein it was held that TOCL, which was wholly owned and controlled by the government was not "likely to evade" the law, while being engaged in the supply and distribution of petroleum and petroleum products, in order to ensure an effective and efficient supply system, Mutatis Mutandis , the same legal position should apply t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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