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TMI Blog2020 (7) TMI 654X X X X Extracts X X X X X X X X Extracts X X X X ..... h Parikh, who was found carrying gold pieces without valid documents while exiting from SEEPZ - Sub-Economic Zone. The said person had a daily entry pass for M/s.Charishma Jewellery, a unit in SEZ and a permanent entry pass as employee of Diastar Jewellery Pvt. Ltd. The said Abhishekh Parikh had produced a sale invoice issued by a unit situated outside SEZ, which is a group company of Charisma Jewellery. The appellant had given a cogent explanation at the time of seizure and also the said explanation was supported by the statement of Proprietor of Tarkesh Art Jewellery. Further, the statement has been corroborated with cogent evidence of the statement of karigar as regards shortage of silver. Further, the shortage of gold has also been supported by the cogent explanation which has not been found to be untrue. The contention of the urgency to manufacture silver jewellery is also supported by proforma invoice for sale in favour of Sun Shine Ltd., Hong Kong. Appeal allowed - decided in favor of appellant. - Customs Appeal No.50437-50438 of 2019 (SM) - FINAL ORDER NO.50727-50728/2020 - Dated:- 24-7-2020 - MR. ANIL CHOUDHARY, MEMBER (JUDICIAL) Shri Arun Goyal, Advocate fo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onfiscation under Section 115 of the Customs Act, 1962, as the same were being removed for clandestine removal in contravention of the provisions of SEZ Act, 2005 read with the provisions of Customs Act, 1962 (as made applicable), the silver grain totally weighing 78.780 kgs. valued at ₹ 35,70,310/- was seized along with the vehicle bearing no.RJ-19 CA 6174 Make Hundai Santro valued at ₹ 60,000/- under Section 110 of the Customs Act, 1962. 3 . The Unit premise situated at Plot No.H-63, SEZ-II, Sitapura Industrial Area, Jaipur was also visited by the Customs Officers on 04.08.2016 and the stock of gold, finished gold jewellery, unfinished silver jewellery and silver in manufacturing process were taken. On physical verification of the stock available in the unit, 4859.384 gms. Of 0.999 purity gold/ gold jewellery and 54333.30 gms of 0.995 purity silver/silver jewellery/grains/slab were found in stock on 4.8.2016. Subsequently on taking into account the stock as per record of the unit, 85 kgs silver was imported on 27.07.2016 and on physical verification on 4.8.2016, a shortage of 48.481 kgs silver was noticed involving duty amounting to ₹ 2,26,308/-. A detail ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f 464.577 gms. in terms of shortage of gold in stock, after allowing 5% wastage norms was found. The subsequent plea that this shortage is because the gold particles present in dust and in the slurry at the bottom of water tank also did not appear to be acceptable, as no such entries have been shown by the appellant in their stock register. As per Rule 34 of SEZ Rules, 2006, if any goods have not been accounted for in the books of accounts, the duty shall be recoverable on the unaccounted shortage. 5 . Pursuant to the issue of show cause notice dated 31.01.2017 , order of adjudication dated 29.08.2017 was passed, which was modified in part vide impugned order-in-appeal as aforementioned. Being aggrieved, the appellants are in appeal before this Tribunal. 6. Ld. Counsel for the appellant, among others, urges the following grounds:- (A) The impugned order-in-original is wholly beyond jurisdiction and beyond the statutory provisions of the Customs Act read with SEZ Act. (B) Ld. Counsel relies upon the Gazette Notification No.2665(E) dated 5.8.2016 and also on the ruling in the following cases:- (i) M/s.Bajirao Ghosalkar Bhavin Choksi Vs. CC (CSI Airport) Mumbai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at ₹ 21,97,133/-, at the time of verification in the factory premises, the appellant had made a categorical assertion that the quantities were lying in the care of the Karigar, being about 40 kgs. given on 28.07.2016. In spite of the affidavit of the said karigar, Mr.Kapil Soni, dated 15.02.2019, in support of the contention of the appellant, dated 12.08.2016 and 22.12.2016, that upon return of the said Karigar, Mr. Kapil Soni, out of the quantity found short, it was stated that the said worker had stored the quantity of the silver bars in the pit, under the table in the wax room. The said pit was not searched by the officers at the time of search on 4.8.2016. It had also been prayed by the appellant in the letter dated 12.08.2016, the Department may please verify the facts as the said pit is still lying untouched. By the subsequent letter of the appellant dated 22.12.2016, it was further clarified that 10,500 gms. of silver was the manufacturing loss in making of silver jewellery and rest 37,981.370 gms was found available . Further, the said karigar, Mr. Kapil Soni had stated that on his return from leave, he returned 38kgs. of silver to the Production Manager, Mr. Chetan M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... old pieces without valid documents while exiting from SEEPZ - Sub-Economic Zone. The said person had a daily entry pass for M/s.Charishma Jewellery, a unit in SEZ and a permanent entry pass as employee of Diastar Jewellery Pvt. Ltd. The said Abhishekh Parikh had produced a sale invoice issued by a unit situated outside SEZ, which is a group company of Charisma Jewellery. It was alleged by the Customs that goods was being attempted to be smuggled into DTA from SEZ. Vide order-in-original, it was held that there was an attempt to remove gold from Charisma Jewellery with intent to evade duty. Accordingly, it was held that 11 pieces of diamond studded gold jewellery was liable for confiscation under Section 111(j) and (o) of the Customs Act. This Tribunal took notice of Section 51(1) and Section 53(1) of the SEZ Act, 2005,wherein Section 51 (1) provides that, SEZ Act shall have effect notwithstanding anything inconsistent therewith contained in any other law for the time being in force or in any instrument having effect by virtue of any law other than this Act. . 11. Further, Section 53(1) of the SEZ Act provides that A SEZ shall, on and from the appointed day, be deemed to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te expressions, means bringing into India from a place outside India. Notwithstanding the deemed status of being outside the Customs territory, zones are very much within the territory of India and the bringing out of goods from a zone fails to meet the definition of import under Customs Act, 1962 and consequently fails the test of invoking the provisions of section 111 and 112. Even if the goods are subject to duty, section 12 of Customs Act, 1962 is not applicable owing to the definition of import ; the charging section is section 26 of Special Economic Zones Rules, 2005 which is outside the scope of invoking by the original authority. Colloquial comprehension or usage of export or import in relation to movement of goods to and from zones cannot substitute for the statutory definitions. Recourse to penal provisions without clear understanding of legalities is the surest mode of reverting to arbitrariness and lawlessness that preceded the dawn of civilization. 13. The question that, then, begs an answer is whether the alleged misdeeds of the appellants would have to be tolerated. That does not have to be so; the Special Economic Zones Rules, 2005 allows duty-free consump ..... X X X X Extracts X X X X X X X X Extracts X X X X
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