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TMI Blog2017 (9) TMI 1454X X X X Extracts X X X X X X X X Extracts X X X X ..... f profit from such illicit transaction of removal of goods from the authorised SEZ operation to the local market would be 3 to 4% in the Respondent's case - quantum of redemption fine and penalty upheld. Appeal allowed. - Customs Appeal No.10243 of 2017-DB - A/12576/2017 - Dated:- 15-9-2017 - Dr. D. M. Misra, Member (Judicial) And Mr. Ashok K.Arya, Member (Technical) Dr. J. Nagori, A.R. For the Appellant-Revenue Shri S.R. Dixit with Shri M. Soni, Advocates For the Respondent ORDER Per: Dr. D.M. Misra This appeal is filed by the Revenue against the Order-in-Original No.SUR-EXCUS-002-COM-57-16-17 dated 4.11.2016 passed by the Commissioner, Central Excise, Customs Service Tax, Surat II. 2. Briefly stated the facts of the case are that the Respondent had imported a consignment of gold bar totally weighing 50 kgs. against Bill of Entry No.002436 dated 11.6.2014 for authorised operations in its Unit in the SEZ, at Sachin, Surat. On 11/12.06.2014 on the basis of intelligence, the Directorate of Revenue Intelligence (DRI), intercepted a vehicle carrying 25 kgs. of gold bars coming out of the SEZ, Sachin which belonged to the Appellant, M/s Okay Impex, S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law in relation to goods imported or exported should also be considered as prohibited goods. He has submitted that the gold was imported by the Respondent to be used for authorised operations within the SEZ for export of goods, however, they were removed from the SEZ in contravention of the Circular No.25 issued by RBI dated 14.8.2013 and also the CBEC Circular No.31/2013 dated 4.9.2013 without any intimation or permission from the proper authority before such removal, instead, by concealing the same in the vehicle intercepted by the DRI officers. Therefore, in view of the ratio laid down in the above two cases, prohibited goods means any goods imported or exported is subject to any prohibition under this Act or any of the law for the time being in force. It is his contention that once it is held to be prohibited goods, Ld. Commissioner has no discretion to direct absolute confiscation of the goods. In support, he has referred to the judgments of the Hon ble Madras High Court in the case of C.C.(Air), Chennai I Vs. Samynathan Murugesan - 2009 (247) ELT 21 (Mad.) and in the case of C.C.(Air), Chennai I Vs. P. Sinnasamy - 2016 (344) ELT 1154 (Mad.). 4. Further assailing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne, the ld. Advocate submitted that the argument of the Revenue for absolute confiscation of the goods cannot be accepted as gold is not a prohibited item. Mere violation of the condition of the exemption Notification could not warrant absolute confiscation as held in the case of Neyveli Lignite Corporation - 2009 (242) ELT 487 (Mad.). Further, he has submitted that the ld. Commissioner has rightly exercised jurisdiction in directing confiscation of the goods in accordance with the provisions of Section 125 of the Customs Act, 1962. In support, the ld. Advocate referred to the judgment of Hon ble Bomaby High Court in the case of C.C.(AP), Mumbai Vs. Alfred Menezes - 2009 (242) ELT 334 (Bom.) and in the case of C.C. (Air), Chennai I Vs. P. Sinnasamy - 2016 (344) ELT 1154 (Mad.) and C.C. (Preventive) Vs. Uma Shankar Verma - 2000 (120) ELT 322 (Cal.). Further, he has submitted that the total duty liability on the said goods is only ₹ 27.50 lakhs applying concessional rate of duty, available for removal of goods from SEZ area, however, they had paid the total duty of ₹ 69.52 lakhs with interest thereon, as per the tariff rate of 10%; also penalty imposed on them a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Court in the case of Alfred Menezes case (supra). Their Lordships after analyzing the said provision of Section 125 of the Customs Act observed as follows: 3. It is, therefore, clear that Section 125(1) deals with two situations (1) the importation and exportation of prohibited goods and (2) the importation and exportation of any other goods. Insofar as importation or exportation of prohibited goods, the expression used is that where the goods were confiscated, the officer may . In the case of any other goods, which are confiscated, the officer shall . 4. It is, therefore, clear that insofar as the prohibited goods are concerned, there is discretion in the officer to release the confiscated goods in terms as set out therein. Insofar as other goods are concerned, the officer is bound to release the goods. In the instant case, we are concerned with prohibited goods. The officer has exercised his discretion. The Tribunal [2009 (236) E.L.T. 587 (Tri. - Mum.)] has upheld the order of the adjudicating officer. 9. This principle is later followed by the Hon ble Madras High Court recently in P. Sinnasamy's case (supra). Thus, in view of the aforesaid prin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... zed goods. 10. However, on the issue of considering the quantum of redemption fine imposed by the adjudicating authority, we find substance in the contention of the Revenue inasmuch as, wiping out of profit cannot always be the yardstick invariably in all the circumstances in fixing the quantum of fine; also in the present case there has been no data to support the finding that the margin of profit from such illicit transaction of removal of goods from the authorised SEZ operation to the local market would be 3 to 4% in the Respondent s case. Considering the facts and circumstances of the case including that the Respondent had already paid the amount of duty involved along with interest and penalty and to meet the ends of justice, it would be appropriate, if the redemption fine is fixed at ₹ 40.00 lakhs. Regarding the correctness of the duty paid by the Respondent while approaching the Settlement Commission, which was been appropriated by the adjudicating authority in the impugned order, we do not find merit in the contention of the Revenue that the quantum is incorrect inasmuch as, the Revenue has not come up with the correct amount of duty required to be paid after denyi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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