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TMI Blog2008 (11) TMI 223X X X X Extracts X X X X X X X X Extracts X X X X ..... port took place in March 1998; the duty foregone was Rs. 22,17,947/-. M/s. Turnkey Software Solutions has also taken a dedicated communication line from STPI on a monthly lease of Rs. 8 lacs per month. This leased line enabled direct link between New York and New Delhi through Sattelite. With the help of his brothers in USA. Shri Rakesh Gupta established business with M/s. Turnkey Software Solutions LLC based in Houston. (b) Sampark Marketing Co. Ltd. was situated in the adjacent floor in the same building as that of Turnkey Software Solution. This company was also started by Shri Rakesh Gupta with Shri Anup Kumar Sinha as one of the directors. This company had in employment one Ms. Gurvinder Gaur alias Sonia as receptionist and one Ashok as peon and no other person was in employment in the said company. The company had taken 125 telephone connections (60 lines in January 98 and 65 lines in March 98) from MTNL said to be for the purpose of telemarketing. (c) The above mentioned 100% EOU another 100% EOU and the connected marketing companies were searched by the Customs officers in the presence of panch witnesses and later on the officers of STPI, MTNL and BSNL were associated. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty of Rs. 39,35,735/- imposed a penalty Rs. 50 lakhs on the company. He also imposed penalty of Rs. 50 lakhs on Shri Rakesh Gupta. By the same order he confiscated goods belonging to Systech Equipment India Ltd. confirmed duty demand, imposed penalty on M/s. Systech Equipment India Pvt. Ltd. In these proceedings we are not concerned with the said findings against M/s. Systech Equipment India Pvt. Ltd. 4. On behalf of the appellants, following submissions were made: (a) The LOP dated 17-12-97 granted by the STPI to the 100% EOU was valid for three years and thus has three years as period of gestation up to 16-12-2000 for commencement of production. They were further granted five years after expiry of three years for fulfilling export obligations. The investigations were commenced even before completion of three years. (b) The Department offered only four witnesses for cross-examination and none of the witnesses supported the case of the Department and the adjudicating authority did not offer cross-examination of the remaining witnesses. The statements of various persons relied upon by the Department were taken under coercion and threat of authorities and hence not reliable. (c) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aken before initiating recovery proceeding against 100% EOU. The jurisdiction of the Customs Authorities and the powers to demand duty short levied/short paid/not levied are not dependent on any permission of the Development Commissioner as the same flow from the provisions of the Customs Act. If there is any violation of internal arrangement/understanding between the Development Commissioner and the Customs Authorities, the same can not a ground to hold that the customs authorities cannot exercise the powers vested on them. 6.3 They were given 100% EOU status by STPI for the purpose of developing and exporting software; for the said purpose they were permitted duty free import of sophisticated equipments; they were provided STPI dedicated communication links between Delhi and Houston in USA. The import of equipments, installation of same and commencement of production are to be completed within the period of validity of LOP i.e. within three years which was to end on 16-12-2000. This period of three years is only an outer limit. In this case it is not disputed that the machinery/equipments imported were promptly installed. 6.4 The installed equipments were used for unintended an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ". In the present case, goods have been used for unintended and unauthorised purposes. They have been used by Sampark Marketing Systems as well. Without going into any possible violation under other Acts, it is clear case of violation the conditions of the Notification No. 140/91-Cus., dated 22-10-91 and therefore, the goods are liable for confiscation under Section 111(o) of the Customs Act. Section 111(d) of the Customs Act is not applicable. However, it is not denied that the show cause has clearly indicated the nature of post-import violation indulged in by the appellant and therefore the confiscation should be treated as under Section 111(o) of the Customs Act and upheld. Ld. DR made a submission that the duty becomes payable even if the appellant does not redeem the goods and for the said purpose he relied on the decision of the Larger Bench in the case of Bombay Hospital Trust - 2005 (188) E.L.T. 374. In the light of the above, we hold that the applicable duty shall be "payable irrespective of whether they redeem the same or not independently of Section 125(2) as the duty is recoverable under Section 12". 6.7 However, a submission has been made that the value declared at Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X
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