822 824, 818 820, 815 817, 825 827, 1537 1539, 4641 of 2004 and Civil Appeal No.
2/88 dated 28.7.1988.
155/92 Cus dated 30.3.1992 and Notification No.
I impose penalty of Rs.2,87,000/ Rupees Two Lakhs Eighty Seven Thousand only on M s. M.K. Jewellers M s. Jewel Exports Pvt.
196/87 and 177/94 Cus and the EXIM Policy and, therefore, 6410.885 grams of gold valued at Rs.28,72,076/ was liable to companyfiscation under sections 111 d and 111 o of the Customs Act, 1962.
Public Notice No.2/1988 dated 28.7.1988 issued by the Commissioner of Customs, Airport in terms of the abovesaid numberification required the units in SEEPZ to maintain registers as per proforma annexed thereto.
The Commissioner held that the shortage of 6410.885 grams of gold was valued at Rs.28,72,076/ and, therefore, the custom duty of Rs.20,82,225/ as demanded in the show cause numberice was also payable.
Ltd. under Section 112 a of Customs Act, 1962.
During the investigation, the respondent unit claimed that the excess manufacturing wastage loss took place in the production of jewellery and the same was available in the form of dust slurry and the gold was recoverable by refining the same and the claim of loss made at the time of export was approximation.
The respondent, aggrieved by the said order of the Commissioner of Customs, preferred an appeal before the Customs, Excise and Gold Control Appellate Tribunal, West Regional Bench, Mumbai for short the Tribunal .
Sections 28 and 114A are reproduced as under Notice for payment of duties, interest, etc.
The Commissioner of Customs passed the following order I companyfirm the demand of duty of Rs.20,82,255/ Rupees Twenty Lakhs Eighty Two Thousand Two Hundred Fifty Five only under Section 28 of Customs Act, 1962.
The Commissioner of Customs in his order observed that numbercause of companylusion, wilful misstatement or suppression of facts has been brought out in the show cause numberice so as to invoke the provisions of section 114A of the Customs Act, 1962.
No further loss is permitted on the repairs of the imported products as the claim of loss is admitted at the time of an initial export of the products.
177/94 Cus dated 21.10.1994.
The Commissioner of Customs held that the above shortage is violation of the companyditions of the Notification No.
Therefore, he did number find that it was a fit case for invoking section 114A of the Customs Act, 1962 relating to the penalty.
The said numberification, inter alia, permitted graded percentage of gold wastage or loss depending on the value addition achieved, on the jewellery of the description specified therein, and provided that scrap, dust or sweepings may be forwarded to the Government Mint by the importer for companyversion into standard gold bars and returned to the said zone in accordance with the procedure specified by the Commissioner of Customs in this regard.
Amongst other companyditions, the said numberification required that the importer shall maintain a proper account of import, companysumption and utilization of the goods and of exports made by him.
The Commissioner of Customs in his order dated 27.7.2001, after companysidering the show cause notice and the reply filed by the respondent, observed that on 11.11.1995, the Officers attached to Preventive Commissionerate of Mumbai Customs companyducted the stock taking and verification of records which resulted in detection of shortage of 6410.885 grams of gold, valued at Rs.28,72,076/ .
177/94 and as clarified by the Ministry of Finance vide letter No.305/91/94FTT dated 11.10.1994.
1 When any duty has number been levied or has been short levied or erroneously refunded, or when any interest payable has number been paid, part paid or erroneously refunded, the proper officer may, a in the case of any import made by any individual for his personal use or by Government or by any educational, research or charitable institution or hospital, within one year b in any other case, within six months, from the relevant date, serve numberice on the person chargeable with the duty or interest which has number been levied or charged or which has been so short levied or part paid or to whom the refund has erroneously been made, requiring him to show cause why he should number pay the amount specified in the numberice Provided that where any duty has number been levied or has been short levied or the interest has number been charged or has been part paid or the duty or interest has been erroneously refunded by reason of companylusion or any wilful misstatement or suppression of facts by the importer or the exporter or the agent or employee of the importer or exporter, the provisions of this sub section shall have effect as if for the words one year and six months, the words five years were substituted.
During the investigation, the respondent unit claimed that the said quantity of gold found short was recoverable from the dust slurry lying in the unit.
The appellant Commissioner of Customs, Mumbai, aggrieved by the said judgment of the Tribunal, has preferred this appeal under section 130E b of the Customs Act, 1962.
Though the said 6410.885 gms of gold, valued at Rs.28,72,076/ found short is liable for companyfiscation, since the same is number available for companyfiscation, while companyfirming its liability of companyfiscation under section 111 d and 111 o of Customs Act, 1962, I am number ordering companyfiscation of the said goods.
Since the respondent has laid serious stress on the question of limitation and imposition of penalty therefore, we deem it appropriate to reproduce the provisions sections 28 and 114A dealing with limitation and penalty in the Customs Act, 1962.
On 11.11.1995, acting on information that the Gem Jewellery Units in SEEPZ have been misusing the facility by showing excess manufacturing wastage or loss than permissible under the above mentioned numberification, causing shortage in physical stock, claiming it to be lying in the form of dust, the Officers of the Mumbai Customs Preventive Commissionerate visited the premises of the said unit and verified the records from the period of inception of the unit and took the physical stock of gold followed by detailed investigations which resulted in the detection of a shortage of 6410.885 grams of gold, valued at Rs.28,72,076.48.
With Civil Appeal Nos.
813 814 of 2004 are recapitulated as under The respondent M s M.M.K. Jewellers is a unit in Santacruz Electronics Export Processing Zone, engaged in the manufacturing of plain studded unstudded gold jewellery for export from directly imported gold or from the gold procured from MMTC in terms of Notification No.
For the sake of companyvenience, the facts of Civil Appeal Nos.
He, however, held that these goods are number available for companyfiscation, therefore, by virtue of their acts of companymission and or omission, the respondents have rendered the said goods liable for companyfiscation and rendered themselves liable for penalty under section 112 a of the Customs Act, 1962.
7274 of 2005 Dalveer Bhandari, J. The questions of law involved in all these appeals are identical, therefore, we propose to dispose of these appeals by this companymon judgment.
The Tribunal observed regarding clauses 5 and 8 of the numberification that one has to be practical that when the jewellery is manufactured out of the raw material and when the gold is companyverted from primary form to the end product, there may be certain dust which may fly from the place of manufacture or it may even be irrecoverable loss due to the process of manufacture of the final product.
The appeal filed by the respondent was allowed with companysequential relief.
The Tribunal decided all these 14 identical appeals by a companymon judgment dated 19.6.2003.
The Tribunal also held that the companyfirmation of duty is barred by limitation.
196/87 Cus dated 5.5.1987 which was further amended by Notification No.
