JINDAL INTERNATIONAL Vs. COMMISSIONER OF CUSTOMS, KANDLA

JUDGEMENT

(1.) THIS appeal is directed against the order -in -original No. KDL/Commissioner/14/2006 dated 22 -3 -2006.

(2.) THE relevant facts that arise for our consideration are that the appellant herein is a unit located in Kandla Special Economic Zone (KASEZ for short) and is engaged in carrying out authorised operations as defined under Rule 7 of Special Economic Zone Rules, 2003. During the period 17 -6 -2005 to 20 -6 -2005, the officers of the Customs, KASEZ carried out stock verification of various goods imported by the appellant and found that there were shortages. For such shortages, the Customs duty forgone was Rs. 14,67,705/ -. Coming to the conclusion that the said amount is recoverable, show cause notice was issued for demand of said duty and interest thereof and also imposition of penalties. The appellant contested the show cause notice on the ground that the shortage of goods which was noticed by the officers was destroyed in a fire accident which broke out in their unit on 13 -6 -2005 and they sought remission of the Customs duty foregone by the Revenue. The adjudicating authority did not accept the contentions raised by the appellant and held that the provisions of remission under Section 23 of the Customs Act, 1962 is not applicable to the units situated in the SEZ. He also recorded findings that the goods which were imported by SEZ unit was not used by them and hence duty liability arises on the appellant. Coming to such conclusion, he confirmed demand, interest thereof and imposed penalty.

(3.) LEARNED counsel submits that there is no violation of Rule 8, which has been invoked by the adjudicating authority, as there is no unauthorized use or failure to account for the raw materials/inputs, which were found to be short in the factory premises. It is his submission that there is no dispute that there was a fire accident in the appellants factory and there is no mala fide in such fire accident. He would submit that the issue is directly covered by the decision of the Tribunal in the case of Satguru Polyfab Pvt. Limited - 2011 (267) E.L.T. 273.