RAJESH EXPORTS LTD. Vs. COMMISSIONER OF CUS., BANGALORE

JUDGEMENT

(1.) THESE appeals have been filed against Order -in -Original No. 04/98, dated 29 -12 -1998 passed by the Commissioner of Customs, Bangalore.

(2.) THE appellants were availing the benefit of DEEC scheme for import of 24 carat gold free of duty with an Export Obligation. There was intelligence that they were misusing the facility. Hence, on 2 -1 -1998, the jewellery items, which were about to be flown by Lufthansa Air Cargo Flight, were intercepted at the export terminal of the Air Cargo Complex Bangalore for detailed examination. The inventory of the items to be exported was taken. It was found that there were discrepancies in quantity, purity and weight between the declaration and the test results on the samples of the items to be exported. The declared purity of the jewellery item was 22 carats but the actual purity as ascertained by test was much less than 22 carats. Samples were tested in National Aerospace Laboratories (M/s. NAL), Bangalore. Statements of various persons were taken under Section 108 of the Customs Act. Prima facie, it was found that there was a shortage of 4 Kgs. in the consignment of above 65 Kgs. The value comes to Rs. 16,00,000/ -. To put it differently, the mis -declaration of the value of export consignment is to the tune of Rs. 16,00,000/ -. The impugned goods were seized but were provisionally released as the appellants had to fulfill the Export Obligation in terms of the advance licence issued to them. Show Cause Notices were issued to the appellants on 29 -6 -1998 proposing confiscation of the seized items and demanding duty of Rs. 92,824.60 being the duty foregone in respect of primary gold imported under DEEC scheme in respect of 4.2193 Kgs. of gold found short under Section 28(1) of the Customs Act 1962. Penalty under Section 114(i) was also proposed. The original authority held that the goods presented for export under the four shipping bills dated 31 -12 -1997 totally valued at Rs. 1.97 crores are liable for confiscation under Section 113(d) and 113(i) of the Customs Act 1962. As the goods were released provisionally no redemption fine was imposed. He confiscated the goods covered by shipping bill 049574 dated 31 -12 -1997 valued at Rs. 57.86 lakhs and imposed a redemption fine of Rs. 6,00,000/ - under section 125 of the Customs Act, 1962. He demanded a duty of Rs. 90,444/ - being the duty foregone in respect of 4.1111 Kgs. of primary gold imported under a licence issued under DEEC scheme and found short in the export goods. He imposed a penalty of Rs. 8,00,000/ - on the first appellant under Section 114(i) of the Customs Act, 1962. Further penalties were imposed on the following persons under Section 114 (i) of the Customs Act, 1962 as given below:

(3.) SHRI Kiran K. Javali, the learned Advocate appeared for the appellants and Shri K.S. Bhatt, the learned SDR for the Revenue. The learned advocate urged the following points.