Indian Kanoon - Search engine for Indian Law

37. The learned advocate for the appellant stated that in view of this position, the goods are not liable to confiscation under Section 111 (d) and (o) of the Customs Act, 1962 and no penalty under Section 112 ibid is imposable. He also argued that no penalty under Section 114A of the Customs Act, 1962 could be imposed on any of the appellant.

38. The learned special counsel for the Revenue stated that the goods are rightly confiscated under Section 111 (o) of the Customs Act, 1962 as the post importation conditions are violated and quoted the Honble Supreme Court in the case of Sheshank Sea Foods Pvt Ltd (supra). The learned Special Counsel also stated that the redemption fine in lieu of confiscation of goods is available in view of the Honble Supreme Courts decision in the case of Weston Components Ltd vs CC reported in 2000 (115) ELT 278 (SC) wherein the Honble Supreme Court held that redemption fine is imposable even after release of goods on execution of bond. In the present case the appellant had executed bond at the time of clearance of the goods. The learned special counsel for the Revenue also stated that this is a case of gross misuse of Advance Licensing Scheme covering loss of revenue. From the facts of the case, it is quite evident that the appellant had deliberately disposed of part of the finished goods in the domestic market before fullfilment of export obligation. Moreover, appellants obtained raw material more than their requirement on the basis of adhoc/self declared norms or SION. In view of these facts, penalties are justified on the main appellant as also other individuals who aided and abetted in the evasion of duties.

Section 111 (o): any goods exempted, subject to any condition, from duty or any prohibition in respect of the import thereof under this Act or any other law for the time being in force, in respect of which the condition is not observed unless the non-observance of the condition was sanctioned by the proper officer. As held by the Honble Supreme Court in the case of Sheshak See Foods Pvt Ltd (supra), Section 111 (o) is violated and goods are confiscable under Section 111 (o) of the Customs Act, 1962. Learned advocate has quoted the Larger Bench decision in the case of Shivkrupa Ispat Pvt Ltd vs CC reported in 2009 (235) ELT 623 (Tri-LB) and Honble Bombay High Court in the case of Finesse Creation Inc. & Rishi Ship Breakers for advancing that no redemption fine is imposable. Learned Special Counsel, on the other hand, had quoted Honble Supreme Courts judgment in the case of Weston Components Ltd vs CC, New Delhi reported in 2000 (115) ELT 278 (SC) holding that redemption fine is imposable even after release of goods on execution of bond. In this case, undoubtedly goods were released on execution of bond. Cases quoted by learned advocate for appellants are in different circumstances and are not applicable to the facts of the case. We therefore hold that confiscation under Section 111 (d) and 111 (o) of the Customs Act, 1962 is correct and redemption fine is also correctly imposed.