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TMI Blog2021 (10) TMI 856X X X X Extracts X X X X X X X X Extracts X X X X ..... he goods against the duty liability arising from the impugned order - HELD THAT:- No doubt, the proposition sounds attractive and equitable but, nonetheless duty liability had been discharged under Central Excise Act, 1944 whereas the duty confirmed in the impugned order, including additional duties, are leviable under Customs Act, 1962 and Customs Tariff Act, 1975. In accordance with the provisions of Central Excise Act, 1944, any adjustment of duties paid thereunder is allowable only upon sanction of refund of the same It is not on record that such refund has been sanctioned. There is, therefore, no reason to heed this particular submission. Confiscation of goods - HELD THAT:- Though the goods are liable for confiscation under section 111(o) of Customs Act, 1962 for breach of post-importation condition, confiscation itself is not tenable in law. The finding in the impugned order that the decision in WESTON COMPONENTS LTD. VERSUS COMMISSIONER OF CUSTOMS, NEW DELHI [ 2000 (1) TMI 45 - SC ORDER] would apply owing to the execution of bond does not find favour as the security therein was an earnest of the assurance of the goods being made available for confiscation during the adjudica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Foreign Trade Policy were entitled to exemption under notification no. 93/2004-Cus dated 10th September 2004 subject to several conditions enumerated therein that were also reflected in the licence issued by Director General of Foreign Trade as well as in the contours of this scheme enunciated as paragraph 4.1 of the Foreign Trade Policy 2004-09 issued in pursuance of the powers conferred under Foreign Trade (Development and Regulation) Act, 1992. 3. The substance of the case is that the appellant had, against purchase order no. 131/04.07.2005 of M/s Diamond Exports Ltd for 200 MTs of 'aluminium alloy ingots', with magnesium and silicon content of not more than 1%, undertaken the said clearances and the test certificates against each invoice indicated aluminium content between 99.732 and 99.838 which, according to the tax authorities, did not differ from the content at the time of import. This, argued Learned Counsel for the appellant, did not suffice to counter their affirmation of aluminium ingots having been subjected to manufacturing process that was completed by affixing their brand on each. It was pointed out that the clearances were recorded in the books and against payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant is liable to pay duty on merit rate. In this case, since the amounts have been adjusted by invoking the bank guarantee, in view of the non-fulfillment of the conditions of the said notification, no illegality has been committed by Revenue. Once the dues have been realized, there is no question of further fulfilling the conditions of the Notification. In view of the case-laws decided by this Bench, the redemption fine and penalty are not sustainable because by invoking the bank guarantee, the duty has already been recovered. Whatever the differential amount has not been recovered, the appellant is liable to pay and we confirm the same. Therefore, we cannot set aside the demand of duty as it is implicit that the appellants are liable to fulfil the conditions of Notification and to the extent that they had imported silk which has not been utilized for the purpose of export, they are liable to pay duty and there is no question of time-bar. Even if the wrong rules or sections have been invoked, that will not be a strong ground for the appellant not to pay the duty demanded. The duty demanded, it is seen, has already been adjusted with some differential amount due from the party ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of visiting them with a penalty under the provisions of the Central Excise Rules. In view of the findings the duty demands and penalties are required to be set aside and this appeal allowed.' 6. Relying on the decision of the Tribunal in Titan Industries Ltd v. Commissioner of Central Excise, Chennai [2007 (217) ELT 423 (Tri.-Chennai)] which held that '2. After giving careful consideration to the submissions, we note that there is no serious contest in this appeal against the Commissioner's finding that the goods in question are chargeable to duty of excise on account of the fact that the post-import activity undertaken by the assessee on the goods amounted to 'manufacture'. This finding of learned Commissioner is based on Section 2(f)(iii) of the Central Excise Act and the same is beyond question. However, learned Commissioner ought to have enabled the assessee to honour the demand of duty by way of debit in Cenvat account. The impugned order itself has noted that Cenvat credit of CVD paid on the imported watches is admissible to the assessee. It appears from the records that this credit exceeds the amount of duty of excise demanded. In the circumstances, we are of the vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cation for confiscation of the goods inasmuch as the goods were rightly allowed duty-free clearance under a valid notification. Also the goods were not available for confiscation. The further contention of the ld. Counsel is that there was no legal basis for demand of interest on the duty amount inasmuch as the provision relating to interest was incorporated subsequent to the import of the goods.' 8. Learned Authorised Representative asserts that, notwithstanding the several submissions on manufactured goods having been cleared, the utilization of the goods imported against the said exemption notification for purposes other than manufacture of export goods is not tenable in view of condition no. (vii) in notification no. 93/2004-Cus dated 10th September 2004. It is also submitted that the claims of manufacture having been effected is also not tenable as the percentage of aluminium contained in the ingots said to be 'aluminium alloy ingots' did not vary from the content in 'aluminium ingots' as described at the time of import. It is pointed out that the test reports seized from the premises of the appellant suffices to establish the correctness of the allegation and, more so, as th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s duty liability had been discharged under Central Excise Act, 1944 whereas the duty confirmed in the impugned order, including additional duties, are leviable under Customs Act, 1962 and Customs Tariff Act, 1975. In accordance with the provisions of Central Excise Act, 1944, any adjustment of duties paid thereunder is allowable only upon sanction of refund of the same It is not on record that such refund has been sanctioned. There is, therefore, no reason for us to heed this particular submission. 11. In so far as the confiscation of the goods which, admittedly, stand converted into the final product of M/s Diamond Exports Ltd is concerned, it has been settled by the decision of the Hon'ble High Court of Bombay in Commissioner of Customs (Import), Mumbai v. Finesse Creation Inc [2009 (248) ELT 122 (Bom.)] holding that '5. In our opinion, the concept of redemption fine arises in the event the goods are available and are to be redeemed. If the goods are not available, there is no question of redemption of the goods. Under Section 125 a power is conferred on the Customs Authorities in case import of goods becoming prohibited on account of breach of the provisions of the Act, rules ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legation in the Show Cause Notice are supported by the evidences like test report indicating the invoice number, the invoices issued to M/s. Diamond Cables, statements of the responsible persons from both the parties etc. I find that the unit has deliberately misdeclared the goods as aluminium alloy ingots in order to hide their original identity as imported aluminum ingots under Advance Authorization. Thus the goods are liable for confiscation under section 111(o) of the Custom Act and unit is liable for the penal action under section 114A of the Act. Shri Hitesh Shah, Director of the company was aware of the diversion of the goods and responsible for evasion of the duties as alleged in the Show Cause Notice hence I find that he is liable for the penalty under section 112(a) of the Act. The party has executed a bond for the relevant license and thus I find that there is obligation on the party to use the imported goods in the finished product for the export. The party has executed a bond for following conditions of the license and notification. However the party has diverted the goods and hence I find that the goods can be confiscated and fine can be imposed. In view of above disc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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