- (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: (1) The demand of duty of Rs. 2,57,90,900/ under the proviso to section 28 (2) of the act on M/s B. V. Star was confirmed. A similar amount was Imposed as penalty under section 114 (A) of the Act. (2) 8604.5 gms. of gold and 844.16 cts. of diamonds valued at Rs. 62,86,823/- and capital goods of Rs. 58,58,696/- were held to be liable for confiscation under sections 111 (d) , 111 (j) , 111 (o) of the Act. (3) Confiscation of capital goods under seizure valued at Rs. 1,06,37,742/- found in the premises of M/s B. V. Jewels along with motors, hand pieces and carbon brushes valued at Rs. 36,70,765/- under the aforesaid provisions were directed to be confiscated. However, M/s B. V. Star was given an option to clear the goods on demand of fine of Rs. 15,00,000/- in lieu of confiscation in terms of section 125 (1) of the Act. It was clarified that the fine in lieu of confiscation was to be in addition to any duty payable in respect of such goods as prescribed under section 125 (2) of the Act. (4) Penalty of Rs. 12,00,000/- was imposed on M/s B. V. Star under section 112 (a). (5) The demand of duty of Rs. 12,94,12,122/ - under the proviso to section 28 (2) of the act on M/s B. V. Jewels was confirmed. Similar amount was imposed as penalty in terms of section 114 (A) of the Act. (6) It was held that 73730 cts. of diamonds valued at Rs. 26,29,54,490/- and capital goods found missing valued at rs. 58,54,698/- were liable for confiscation under sections 111 (d) , 1110) and 111 (o) of the Act. It was noticed that these items were not available for confiscation. 23 pieces of high value diamonds valued at Rs. 39,63,286/- under the aforesaid provisions were directed for confiscation. (7) Broken diamonds valued at rs. 6,91,139/- under sections 111 (o) and 119 of the Act was also directed for confiscation. The redemption of seized goods on payment of fine of Rs. 70,000/- was allowed. (8) Confiscation of diamonds and diamond studded in semi-finished gold jewellery valued at Rs. 4,03,72,667/- along with inseparable gold weighing 6423.32 gms. valued at Rs. 26,81,736/- were directed to be confiscated. Redemption fine of rs. 43,00,000/- was fixed. Unaccounted diamonds valued at Rs. 27,00,76,393/.- was held to be liable for confiscation but it was observed that these were not available for confiscation. (9) Penalty of Rs. 5 crores was imposed on m/s B. V. Jewels under sections 112 (a) and 114 (i) of the Act. (10) Penalty of Rs. 10,00,000/- was imposed each on Mr. Suresh Mehta and Mr. Suken Mehta. (11) Penalty of Rs. 2,00,000/- was imposed on Mrs. Saroj Mehta, Mrs. Sapna Mehta, shivani Mehta, Mr. B. V. Shah, Mr. Rajesh b. Shah and Mr. Bharat S. Shah. (12) Penalty of Rs. 1,00,000/- was imposed on Mr. Vijay Shah.
(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.;