AMITAVA LALA, J. - (1.) THIS is an appeal of the appellant-company challenging the order dated 23rd September, 2008 passed by the Customs, Excise and Service Tax Appellate Tribunal, New Delhi.
(2.) THE contention of the appellant is that it manufactures and exports gold jewellery. It received 15 Kgs. of imported gold (admittedly 8 Kgs. by way of purchase and 7 Kgs. by way of loan) from M/S Metal and Mineral Trading Corporation Limited (for short MMTC). They were required to manufacture gold jewellery and export the same directly in respect of gold purchased by them and through MMTC in respect of gold taken on loan. On 18th March, 1996, strong room of the appellant was sealed by the customs authorities on account of alleged malpractice and series of summons were issued and correspondences were exchanged aiming to verify factual position of availability of stock. On 26th April, 1996, the strong room was broken in presence of panch witnesses and no gold was found. The appellant made allegation that the gold has been taken away by the customs officers/MMTC officials by breaking open the strong room when the responsible persons of the appellant company were not present in the unit. A criminal complaint was filed against the appellant by MMTC before the appropriate court of Magistrate and the appellant/s was/were discharged by order dated 20th August, 1999, the relevant portion of which is as follows: "From the above discussion I find that the above gold was not entrusted to the accused but ownership of the gold had passed on to the accused for practical purposes. Even the delay in the export of gold ornaments does not appear to be because of the accused but the role of the officers of MMTC appears to be existent in creating this dispute. If MMTC levels the charge of breach of settlement and the agreement against the accused the case of compensation for that is already pending before the Arbitration. No, primafacie case of misappropriation of the said gold dishonestly and with criminal intention, conversion into his own use and its disposal contrary to the contract and the provisions of law is made out. On the other hand, it is patent instance of arbitrariness of the officers of MMTC and abuse of authority which should be taken notice of by the Government of India so the purpose for which the corporation was established is not frustrated. There appears to be no appropriate ground to me to frame the charges under Sections 406, 409 I.P.C. against the accused. The charge is baseless and the accused may be discharged at this stage." However, a show cause notice was issued on 22nd December, 1998 upon the appellant/s on the ground that the export obligations have not been fulfilled and gold procured duty free has not been accounted for and accordingly duty was sought to be demanded from MMTC/the importer and penalties were sought to be imposed on MMTC and the appellant. Vide order dated 13th April, 2005, the Commissioner of customs confirmed the demand of duty of Rs. 54, 47, 775/- from MMTC and imposed penalty of Rs. 75, 00, 000/- upon them. In addition, he imposed penalty of Rs. 25, 00, 000/- was imposed upon the appellant company and Rs. 25, 00, 000/- upon its Director.
(3.) THE appellant contended before the tribunal that the appellant company has been taken over by U.P. State Financial Corporation as they were not able to repay the loan taken from them. The company is not functioning and facing acute financial hardships. The director of the company has not misappropriated the gold and he was also facing acute financial hardship and an affidavit to that effect has also been filed.;