9911796707
TMI Blog2005 (8) TMI 176X X X X Extracts X X X X X X X X Extracts X X X X ..... imported goods are supposed to have been used for the manufacture of goods to be exported. The main charge against the appellant is that they disposed of certain quantity of the imported yarn in the local market. The proceedings initiated against the importer culminated in the issue of Order-in-Original dated 19-2-1998 by the Commissioner of Customs. The Commissioner confirmed the duty demanded in the show cause notice and imposed penalties on Shri Mangilal Shah and Shri Jitender Shah Directors of M/s. Kozy Silks Pvt Ltd. The appellants approached this Bench for relief. While remanding the case to the Original Authority, the CESTAT gave the following directions. "On going through the facts of the case, we find that the party has taken th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er erred in totally ignoring the claim of the appellant. The learned Commissioner erred in observing that "it is quite possible that the stock was available as on 31-7-1996, but was not available as on the date of Mohazar. Further why no hypothecation statement for the subsequent period have not been forthcoming." (ii) The investigating officers of the DRI did not verify the stock lying in the godown of the State Bank of Mysore despite the fact that this was brought to their notice and they took possession of the said godown. (iii) The learned advocate furnished details of hypothecation deeds dated 22-7-1996, 25-9-1996, 30-9-1996 and 31-10-1996 and said at the time of search on 29-8-1996 by the DRI or even later, the impugn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e been found by the DRI Officers during the course of investigations. (viii) The DRI have not established the complete chain of events namely from the time of the import of the impugned goods to the alleged disposal. (ix) The learned advocate relied on the decision of the Hon'ble Supreme Court in the case of Kailash v. State of UP - AIR 1994 SC 470 and said that in the absence of corroborative evidence, duty liability cannot be fastened on them. (x) In the present case, when the advance licences were seized, the same were still valid and the appellants could have discharged the export obligation but DRI acted high handedly by seizing valid advance licences and preventing the appellants from fulfilling the export obli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... arn, they completed the export obligation of 1242 Kgs. only. At the time of investigation, the imported goods were not available. It is the contention of the appellant that the stock was available and the same was hypothecated to the State Bank of Mysore. In order to examine this issue only, the case was remanded by the CESTAT to the Commissioner. The Commissioner has given a very detailed finding to justify why he could not accept the contention of the appellant that the goods imported under advance license were the same as those hypothecated to the bank. When the DRI officers visited the appellants unit on 29-8-1996, the appellants did not state that the goods were hypothecated to the Bank. In fact Shri Mangilal Shah in his statement has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e disposal. The burden of showing that the imported goods have not been disposed of is clearly on the appellants who have availed the notification. Their contention that the goods are in existence under hypothecation to the bank cannot be accepted in the light of the Commissioner's findings. The appellant is liable to pay the duty amount of Rs. 26,90,940/- only. It is seen that the amount had already paid during the course of investigation. However, Sections 114A and 28A cannot be invoked for the period prior to 28-9-1996. Hence, penalty under Section 114A of the Customs Act is liable to be set aside. Interest under Section 28AB is also not leviable. The penalties under Section 112 imposed on S/Shri Mangilal and Jitender Shah are very reaso ..... X X X X Extracts X X X X X X X X Extracts X X X X
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