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TMI Blog2023 (12) TMI 798X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant has taken place. Consequently, the conditions of the exemption notification read with the relevant circular and FTP stands fulfilled. Once the appellant had exported the jewellery and submitted all the proof of exports to the bank / importer and relying on those documents of export the customs authorities had not even doubted on the genuineness, the appellant cannot be held responsible for any violation so as to be charged with any kind of penalty under the Act. The reasoning adopted by the revenue is that as per the tally sheets on certain days, the appellants were having stock of only duty-free gold and they did not have any stock of duty-paid gold and therefore the inference would be that they have diverted the duty-free ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gned order imposing penalty of Rs.5 lakhs on M/s Derewala Industries Ltd., and Rs. 1 lakh on Shri Yogendra Garg, Director of M/s. Derewala Industries Ltd., under section 114AA of the Customs Act, 1962 is, therefore set aside - Appeal allowed. - MS. BINU TAMTA, MEMBER (JUDICIAL) Shri Anurag Basu, C.A. for the appellant Shri Mahesh Bhardwaj, Authorised Representative for the respondent ORDER Two sets of appeals have been filed by the two appellants, one being the firm and the other being the Director of the firm challenging the Order-in-original No. 72/2022-23/SJ/PCOMM dated 16.03.2023 whereby the Commissioner of Customs imposed penalty of Rs. 5 lakhs on the appellant, namely M/s Derewala Industries Ltd., under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its director respectively. Hence two separate appeals have been filed by the company and the director challenging the imposition of the said penalty before this Tribunal. 3. I have heard the learned Counsel for the appellant and also the authorised representative for the revenue and have perused the records of the case. 4. One of the preliminary contentions of the learned counsel for the appellants is that the impugned order has been passed in violation of the principles of natural justice as despite request for adjournment made by them, the matter was decided without providing proper opportunity of hearing. From the perusal of the impugned order, it appears that both the appellants never submitted any reply to the show cause notice. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion or document, which is false, and therefore, no penalty can be imposed under section 114AA of the Act. In support, he referred to the Circular No. 23/2018 dated 23.07.2018 issued by CBIC that there cannot be any one-to-one correlation between the gold procured and the jewellery exported. It is also their submission that the tally ledgers were maintained by them on periodical basis, i.e. either on weekly basis or on fortnightly basis but not on daily receipt basis and it was only for accounting purposes and therefore the tally ledger cannot be a basis for alleging that the appellants had sold the duty-free gold in the open market. In response the learned authorised representative for the revenue has supported the findings of the adjudicat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... importer is required to deposit the amount of duty within seven days of expiry of the period within which the jewellery so manufactured was supposed to be exported. 7. I find that the adjudicating authority after detailed discussion and the submissions made by the Bank Nova Scotia concluded that customs duty proposed in the show cause notice cannot be imposed on the bank as the requisite export obligation papers as submitted by the appellant were placed before the customs authority and acting thereon the bond executed by the bank was cancelled. 8. The very fact that the customs authorities acted on the export obligation papers, as submitted by the appellant, is evident that export of jewellery by the appellant has taken place. Consequ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orical finding by the adjudicating authority that proof of export for the consignment exported by the appellant were submitted with the customs authorities and on being satisfied, the customs authorities cancelled the bonds executed by the importer at the time of importing the gold. Therefore, it is not a case where the appellant has submitted any false or incorrect undertaking so as to attract the provisions of section 114AA of the Act, which reads as under:- 114AA. Penalty for use of false and incorrect material. If a person knowingly or intentionally makes, signs or uses, or causes to be made, signed or used, any declaration, statement or document which is false or incorrect in any material particular, in the transaction of any busin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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