9911796707
TMI Blog2023 (12) TMI 798X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 5 lakhs on the appellant, namely M/s Derewala Industries Ltd., under section 114AA of the Customs Act, 1962 and Rs. 1 lakh on its Director, namely, Yogendra Garg. So the question to be decided in this appeal is whether penalty so imposed on the two appellants is justified. 2. Show cause notice dated 20.02.2020 was issued to the two appellants along with M/s Bank of Nova Scotia from whom the appellant had purchased the duty-free gold for manufacturing jewellery for export purposes, however, the allegation was that the appellants had sold the stock of duty-free gold in the open market (domestic) which was procured under the condition to be used for the export of the jewellery. On the basis of the investigation, duty amounting to Rs. 99,8 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t both the appellants never submitted any reply to the show cause notice. In terms of their letter dated 27.02.2021 and 14.04.2021, the department supplied the documents to the appellant. Personal hearing of the case was fixed on 30.09.2022, however, adjournment was sought by them on the ground that they had to file financial accounts during that time and accordingly the next date of hearing was fixed on 21.11.2022, however they did not appear even on the said date. On the next date, i.e. 20.02.2023 another adjournment was sought on the ground that the intimation received was late and therefore the date of hearing was fixed on 06.03.2023, for which they had sent a letter dated 01.03.2023, which appears to have been received on 09.03.2023, f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... presentative for the revenue has supported the findings of the adjudicating authority and referred to the statement of Sh. Yogendra Garg where he admitted that approximately 40 kgs of duty-free gold had been sold in the domestic market and he agrees to pay duty, if any. 6. Before proceeding to consider the levy of penalty challenged by the appellant, it is necessary to examine the responsibility cast on the importer as well as the exporter under the exemption Notification No. 57/2000 dated 08.05.2000 and the circulars issued by the department in this regard. Under the exemption notification, the importer is required to execute a bond to either export itself or through other exporters the gold jewellery/articles having gold equivalent to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that export of jewellery by 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. 9. 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 the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in any material particular, in the transaction of any business for the purposes of this Act, shall be liable to a penalty not exceeding five times the value of goods." 11. The adjudicating authority while imposing the penalty on the appellant under section 114AA had proceeded on assumptions and presumptions that the jewellery has been made from the gold purchased from the domestic market on the basis of VAT invoice and depending on price fluctuation, they sold the gold in the domestic market and therefore they have not complied with the undertaking, resulting in giving a false and incorrect declaration. The said reasoning is not sustainable as it is not based on any evidence. I am, therefore of the opinion that there is no ground for imp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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