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TMI Blog2025 (4) TMI 255X X X X Extracts X X X X X X X X Extracts X X X X ..... 06,421/- (Rupees Fourteen Lacs Six Thousand Four hundred and Twenty One Only) under Section 28 of the Customs Act, 1962, read with Section 12(1), 46(1), 47(1), 68, 71 of the Customs Act, 1962; Section 30 of the SEZ Act, 2005; Rule 25, 34, 47 and 48 of the SEZ Rules, 2006, and conditions of the Bond-cum-Legal Undertaking dated 17.06.2015. I order to recover the said demand of Rs. 14,06,421/- from M/s Baba Global Limited. (iii) I confirm the demand of interest on the said amount of duty of Rs. 14,06,421/- under Section 28AA of the Customs Act, 1962, and order to recover the same from M/s E ba Global Limited. (iv) I order to enforce the provisions of Bond-cum-Legal Undertaking dated 7.06.2015, executed by M/s Baba Global Limited for recovery of the aforesaid Redemption Fine, duty and interest thereon. (v) I impose penalty of Rs. 14,06,421/-( Rupees Fourteen Lacs Six Thousand Four hundred and Twenty One Only) on M/s Baba Global Limited under Section 114 A of the Customs Act, 1962 (vi) I impose penalty of Rs. 14,06,421/-(Rupees Fourteen Lacs Six Thousand Four hundred and Twenty One Only) on Shri Ravinder Kumar, Director of M/s Baba Global Limited under Section 112 (b) (ii) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i R.K. Jain was not in the factory on 10.01.2017 and he was not aware about the said stock of saffron. 2.7 After completion investigation and examination of records for the last 5 years, stock of raw material saffron was found short by 37.34 kgs, having value of Rs.38,92,023/- on which Customs duty comes to Rs.14,06,421/-. The duty is liable to be recovered under Section 30 of the SEZ Act, 2005, read with Rule 25,34,47 (4) and 48 (2) off SEZ Rules, 2006, read with Section 28 of the Customs Act, 1962. 2.8 Show cause notice dated 04.01.2019 was issued to the appellant-I, asking to them as to why- "(a) 37.34 kg of Saffron valued at Rs 38.92.023/- involving duty of Rs.14,06,421/- found short at the time of stock taking on 10.01 2017/23.01.2017, which was not duly accounted for and appeared to have been clandestinely removed from NSEZ to DTA from their Unit in terms of various provisions of SEZ Act 2005, SEZ Rules and Customs Act 1968 as explained hereinabove, should not be confiscated under Section 111 (j) of Customs Act 1962, and since the goods were not available for seizure and thereby for confiscation, why Redemption Fine should not be imposed on the subject goods; (b) the Cu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nalty in the rule. Redemption fine imposed, cannot be justified. It is settled law that the goods which are not available could not have been confiscated. Reliance is placed on the decision of this Tribunal in the case of Commissioner of Customs, Mumbai Vs JEWEL Tech India Pvt. Ltd. 2016 (9) TMI 522-CESTAT-Mumbai. Penalty imposed on appellant-II is not justified. 3.3 Authorized Representative reiterates the findings recorded in the orders of the lower authorities. 4.1 We have considered the impugned orders along with the submissions made in appeal and during the course of argument. 4.2 For upholding Order-in-Original, impugned order records as follows:- "5.1 After going through the entire issue, I observe that as per directions of the specified officer, the export consignment of Chewing Tobacco of the importer was subjected to surprise check, in which some discrepancies relating to Brand Name of the product were noticed on account of which a team of officers of Customs, NSEZ, visited the factory premises of the importer on 10.01.2017. During visit physical stock of raw material and finished goods was recoded which was found tallied with the available stock register excep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng period of sixty days. Both of the above situation is not in harmony rather contradictory. I find that use and issue of saffron was under complete control of Sh. Ravinder Kumar and therefore he was responsible for maintaining proper records and proper use of saffron, as prescribed in the SEZ Act, 2005, and the SEZ Rules, 2006. Since, he has willfully indulged in diversion of saffron to DTA without payment of duty and suppressed the facts of diversion from authorities, so I hold him liable for penalty under Section 112 (b)(ii) the Customs Act, 1962. 5.3 As regards the contention of the appellant that the NSEZ officers are not legally authorized to conduct investigation and the Additional Commissioner, Noida Customs Commissionerate, is also not proper authority for issuing S.C.N., I find that the proper reply has already been given by the adjudicating authority in the impugned order." 4.3 In the present case, I observe that stock verification and shortages of stocks has been determined in a unique method by computing the figures from the figures in the balance sheet. Stock was not verified on the basis of stock register/ records that were being maintained or the same were requir ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of saffron as declared by the party vide letter dated 18.09.2018 (in Kg.) Value of Saffron consumed for manufacture of Chewing Tobacco, as per Balance Sheet (Rs.) 2012-2013 35.340 2102352.86 2013-2014 45.500 4309098.67 2014-2015 62.350 5848585.36 2015-2016 49.220 5496968.79 2016-2017 65.480 7006683.22 TOTAL 257.890 2,47,63,689/- 11. It is further seen that as per purchase details of Saffron contained in the party's letter dated 18.09.2018 show that the raw material namely 'Saffron' was sourced from two sources namely by way of import and from local market. As per these details duly supported by purchase Invoices/BOEs, it is observed that the unit price of sourcing of saffron was as tabulated below : - Financial Year Qty. Importe d (kg) Value of imported saffron (Kg) Qty. Procu red (in kg) Value (Kg.) Total sourced (Qnty-Kg. Value) Saffron & Unit price of saffron (Rs. Per Kg) 2012-13 0 0 0 0 0 0 NA 2013-14 50 53.02 18.40 16.59 68.40 69.61 1,01,769/- 2014-15 50 44.76 8.45 9,73 58.45 54.49 93,225/- 2015-16 75 89.44 1.50 1.89 76.50 91.33 1,19,386/- 2016-17 80 81.72 0 0 80 81.72 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nderstood as to why such approach for computation of shortages that on the basis of receipt and consumption in last five years been adopted, stock taking needs to be done on the basis of the stock register and the physical quantity available. Any other method adopted would be based on various presumption and assumptions only which is quite visible in the present case. 4.8 We also find the manner in which appellants have tried to tally the stock is also not having any basis in law. It is also on the basis of assumption and presumptions that they have made infact it is submission of the appellant that the figures of closing stock which was made available not on the basis of any record but on the basis of figures provided by the appellant-II to match the final stock (inclusive of 20 kgs). 4.9 We now face a problem where both the sides are doing an exercise in mathematics rather than determining shortages of the physical stocks vis-à-vis the stock register. For determining the shortages and we find that as per the stock register the entire quantity of saffron was shown as issued and the balance was nil. Rather than seeking explanation about the physical stock found in the fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he unit. Thus, we find that there are certain irregularities are being committed by the Appellants in maintenance of stock register of saffron which should be based on the physical stocks available, like any other raw material. For such a contravention a token penalty needs to be imposed upon the appellant-II under Section 117 of the Customs Act. However, impugned order imposes penalty under Section 114A on the appellant-I and under Section 112 (b) (ii) of the Customs Act on Appellant-II. 4.12 As we do not find any reason to uphold the shortages, demand on the basis of above presumption, we are not in position to uphold the redemption fine imposed in respect of goods not found contrary to the decision of in case of Jewel Tech India Pvt Ltd. [2016-TIOL-2591-CESTAT-MUM] observing as follows: 5. We have considered the submissions made by the learned Special Counsel. We find that the issue has been examined by the Larger Bench of the Tribunal in the case of Bhagyanagar Metals Ltd. Vs. CCE, Hyderabad-II - 2016 (333) ELT 395 (Tri-LB) = 2016-TIOL-454-CESTAT-HYD-LB has observed as follows: 46. Learned Senior Counsel for the appellants contested confiscation of impugned goods and impos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fine could be imposed. We are, therefore, not inclined to accept the contention raised by the appellant on this issue and set aside the redemption fine. 13. The reliance of learned counsel for the revenue upon the provisions of Section 125 of the Act is also misconceived. Section 125 of the Act is applicable only in those cases which have been cleared by the concerned authorities subject to furnishing undertaking/bond etc. However, in the present case, admittedly, the goods were cleared by the respondent-authorities without execution of any bond/undertaking by the assessee. Thus, in view of the fact and circumstances of the case, we find no error in the impugned orders. No substantial question of law arises for our determination in the present appeal and the same is hereby dismissed". 47. Further, learned Counsel pleaded that the fine is payable, if at all, only on redemption of goods. Here there is neither a seizure nor provisional release under bond and, hence, the question of payment of redemption fine either to release the goods or in terms of the bond does not arise. We find that there can be no redemption fine in the absence of any seizure or provisional release of such s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s the redemption fine imposed under Section 125 of the Act in respect of the goods held to be liable for confiscation but which are not available for confiscation, provisions of Section 125 are attracted only in the cases when either the goods are physically available for confiscation or the goods had been released provisionally against the Bond and as per the terms of the conditions of the Bond, the person from whose possession/control the goods had been seized, is bound to produce the goods whenever called upon to do so. We are supported in this view from the judgment of Hon'ble Punjab & Haryana High Court in case of Commissioner of Customs, Amritsar vs M/ s. Raja Impex (P) Ltd. reported in 2008 (229) E.L.T. 185 (P&H)] = 2008-TIOL-280-HC-P&H-CUS wherein the Hon'ble High Court held that when the goods are not available for confiscation for the reason that the same had been released unconditionally, the redemption fine under Section 125 could not be imposed, that Hon'ble Supreme Court's judgment in case of Weston Electronic Components vs Commissioner of Customs, New Delhi reported in 2000 (115) ELT.278 (SC) = 2002-TIOL-176-SC-CUS is applicable only in those cases wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed on execution of bond. Admittedly that is not the situation in this case also. In this case, respondents themselves have diverted the goods and after diversion, proceedings have been initiated. There is no seizure of the diverted goods and release of the same provisionally on execution of bond. Therefore, the issue is covered by the decision of the Hon'ble Supreme Court and in the absence of release on the basis of execution of a bond, goods could not have been confiscated. The decision of the Larger Bench of the Tribunal relied upon by the learned Commissioner is also applicable since in this case also there is no bond with a security is available. The B-17 Bond is a general purpose bond undertaking to fulfil the conditions of notification and other requirements and does not help the Revenue to confiscate and other requirements and does not help the Revenue to confiscate the goods not available and impose the redemption fine in lieu of confiscation. Further, the confiscation always presumes availability of goods and presumption normally is that goods have been seized and thereafter the proceedings would culminate into confiscation or release. Confiscation would mean that se ..... X X X X Extracts X X X X X X X X Extracts X X X X
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