PRETTY WOMEN, SHRI RAMAN Vs. CCE, NEW DELHI

JUDGEMENT

(1.) In these applications, filed by the appellants praying for waiver of pre -deposit of the respective amounts of penalties imposed on them by the Commissioner of Customs as per the impugned order and for stay of recovery of the said amounts pending the appeals, the applications have submitted that the adjudicating authority imposed the penalties on them contrary to the mandatory requirements of Section 112 of the Customs Act 1962 and that pre -deposit of the amounts will cause undue hardships to them.

(2.) I have carefully examined the records. One of these applicants namely M/s Pretty Woman were, at the material time, engaged in the manufacture and export of gold jewellery, as a unit set up in 1993 in the Nodia Export Processing Zone (NEPZ) under the EPZ scheme governed by the provisions of Exim Policy 1992 -97. Under the scheme, they used to procure, duty -free, the primary gold required as raw material for manufacture of jewellery, from M/s metals and Minerals Trading Corporation Ltd. (MMTC) [who imported such gold] under an agreement with them. The gold jewellery manufactured out of such primary gold used to be exported through MMTC only. In this manner, they procured 47 Kgs of imported gold from MMTC and, out of the same, manufactured 35 Kgs. of gold jewellery, which was exported through MMTC subsequently. The Departmental authorities noted the difference of 12 Kgs of gold jewellery, under Pandchama. The authorities made investigations and framed a case against the applicants. The main allegation raised by the Department in the show -cause notice issued to the applicants was that they had clandestinely removed from the EPZ 13 Kgs. of gold which was allegedly liable to confiscation under Section 111 of the Customs Act. It was further alleged that the aforesaid quantity of 10,480 grams of silver jewellery had been brought into the zone by the applicants unauthorisedly and, therefore, the said goods were also liable to be confiscated. The Department also proposed to impose penalty on the applicants under Section 112 of the Act. The SCN also proposed to demand and recover from them Customs duty on the imported gold alleged to have been clandestinely removed from the Zone. All the allegations were denied by the parties. The Commissioner, who adjudicated the dispute, vide impugned order, held that gold -plated silver jewellery weighing 10,480 grams was brought inside the Zone unauthorisedly by the applicants and the same was liable to confiscation and, further, that the applicants were liable to penal action under Section 112 of the Customs Act on account of non -exportation of jewellery within stipulated period. Accordingly, the Commissioner imposed penalties of Rs.5.5 lakhs, Rs.1 lakh and Rs.1 lakhs on M/s Pretty Woman, Shri Raman Mehta and Smt Rajanra Metha respectively and ordered confiscation of the aforesaid quantity of gold -plated silver jewellery. Hence the captioned appeals by the three parties.

(3.) I have heard both sides. Ld. Consultant Shri J.M.Sharma submits that there is no finding in the impugned order that any gold -plated silver jewellery was imported by M/s Pretty Women, nor ils there any evidence on record to show that the jewellery was seized from their unit. In this connection,he has drawn my attention to the Panchamas. On a scrutiny of the Panchamas, it appears that the jewellery was seised from the MMTC's premises. The allegation contained in the show -cause notice with regard to the secure of the silver jewellery is also not specific about the exact premises in the EPZ from which the jewellery is also not specific about the exact premises in the EPZ from which the jewellery was seized. This being the factual position, any finding that the applicants had brought the jewellery into their unit unauthorisedly does not appear to be justifiable. It is further noted that there is no finding in the impugned order that the silver jewellery was imported by M/s Pretty Woman. therefore, prima facie, the silver jewellery does not appear to be liable to confiscation. It appears that the statutory requirements of Section 112(a) or (b) were not adequately satisfied for imposing penalties on the applicants. yet another submission made by ld. Consultant is that the liability of Customs duty on the 12 Kgs of imported gold has already been fixed by the Tribunal on MMTC as per order passed subsequent to the impugned order. he submits that no penalty could have been imposed on these parties in view of the Tribunal' s finding that MMTC was the importer of the gold in question. Ld. Consultant has also pleaded financial hardships of the applicants. He pleads for complete waiver of pre -deposit of the penalty amounts on the ground of financial hardships as well as strong prima facie case on merits.