BHOMIKA INTERNATIONAL LTD. Vs. CC

JUDGEMENT

(1.) The appellant M/s. Bhomika International Ltd. is a 100% Export Oriented Unit (EOU) engaged in the manufacture of cotton knitted fabrics. It is obliged under law to export the goods manufactured by it, except for the quantities allowed to be sold, upon payment of duty, in the domestic market. During the period 8.3.2000 to 7.6.2000 the appellant sent a quantity of over 75000 kgs. of fabric for processing to other units in the Domestic Tariff Area. These goods were required to be brought back and exported. The impugned order has held that these goods were never brought back. Instead, the appellant obtained some other fabrics valued about Rs. 41 lakhs with a view to substituting them for the goods cleared for processing. The impugned order has confiscated those goods. In addition, duty demand of Rs. 34.5 Lakhs has been made on the goods cleared and a penalty of Rs. 10 Lakhs has been imposed.

(2.) There is also a personal penalty of Rs. 1 lakh on Shri Basant Sen Sharma, M.D. of the appellant EOU and lesser amounts of penalty on other officers of the EOU The present appeals by the EOU and Shri Sharma challenge these orders.

(3.) It is the submission of the learned Consultant appearing for the appellant EOU that even if it is held that the appellant is liable to pay duty on the goods cleared (and not brought back) for processing, it only renders of appellant liable to pay duty on the goods so cleared to the domestic market and there is no justification for the confiscation of the goods which were being brought to the factory. The learned Consultant also has submitted that the duty demand has been erroneously computed. According to him the correct duty amount would be only Rs. 7,37,665. The learned Consultant has also submitted that the penalty imposed is disproportionately high when compared to the duty involved. He also has submitted that the imposition of a penalty of Rs. 1 Lakh on Shri Basant Sen Sharma, Managing Director of the Company was not justified, inasmuch as no personal involvement of his in the offence has been established and the entire incident had taken place during his illness.