COMMISSIONER OF CUSTOMS MUMBAI Vs. B V JEWELS

JUDGEMENT

(1.) Customs authorities question correctness of the judgment rendered by the customs Excise and Gold (Control) Appellate tribunal, West Regional Bench at Mumbai (hereinafter referred to as the 'cegat') setting aside the order passed by the commissioner of Customs (Airport) confirming demand of duty and penalty. Background facts in a nutshell are as follows:

(2.) Show cause notice was issued to the respondents alleging shortage of gold and diamonds, capital goods and unauthorized usage of capital goods. It is to be noted that the show cause notice was issued on the basis of certain intelligence gathered regarding infraction of various provisions of the Customs Act, 1962 (in short the 'act') and Customs Rules, 1966 (in short the 'rules') , the EXIM policy and violation of conditions of certain notifications on the basis of which the respondents had availed benefits. The purported action was in terms of sections 111 (d) , 1110) , 111 (1) , H1 (o) , 111 (m) , 112 (a) , 112 (b) , 113 (d) , 113 (i) , 114 (i) and 114 (A) of the Act. The premises of the respondents Mis. B. V. Jewels and m/s B. V. Star were searched. Both the units were situated at plot No. 55 of Santacruz electronics Export Processing Zone (in short 'seepz') , Andheri East, Mumbai. Officers of Customs visited the unit on 31.1.2000, recorded statements of the Accounts Manager and stock taking was done. Verification continued for several days. Partner Suresh Mehta joined the verification on 3.2.2000. After completing verification it was found that there was large scale evasion of duty, shortage of stocks of certain items while excess stock was found in respect of some other items. Additionally, it was found that there was shortage of capital goods and unauthorized usage of capital goods. The unaccounted diamonds, and capital goods were seized and show cause notice was issued granting opportunity to the respondents to have their say in the matter. The Commissioner considered the show cause reply and after considering the materials brought on record by departmental authorities and the reply furnished by the respondents, passed the order to the following effect:

(3.) The order of the Commissioner was questioned in appeal before CEGAT which by the impugned judgment set aside the same holding that the accusations were not established. The shortage or excess as claimed were not substantiated and various departmental notifications were not properly construed by the Commissioner. The order of the CEGAT is challenged in these appeals.