- (1.) This order shall dispose of CUSAP Nos. 3 and 4 as common questions of fact and law are involved therein. For brevity, the facts are being extracted from CUSAP No. 3 of 2012.
(2.) CUSAP No.3 of 2012 has been preferred by the revenue under Section 130 of the Customs Act, 1962 (in short "the Act") against the order dated 6.7.2011 (Annexure A-3) passed by the Customs, Excise and Service Tax Appellate Tribunal, New Delhi (hereinafter referred to as "the Tribunal), claiming the following substantial questions of law:- (i) Whether, in the facts and circumstances of the case, the judgment rendered by the Hon'ble Tribunal, absolving the Respondent from fraudulent import causing huge evasion of duty, without confirming the veracity of the version of the Respondent, is correct or not (ii) Whether the Hon'ble Tribunal is right in law in holding that the evasion of Customs Duty by the Respondent was not proved in view of absence of evidence and was right in allowing appeal of the Respondent, when the case of evasion of duty is made out against the Respondent on the basis of specific information containing details of import by the Respondent supplied by the port of import
(3.) Briefly stated, the facts necessary for adjudication of the present appeal as narrated therein are that the respondent-assessee is a 100% Export Oriented Unit (EOU) holding LOP No. PER/561/1995/ EOA161/95 dated 18.10.1995 issued by the Development Commissioner, Noida Export Processing Zone, Noida in terms of Para 9.7 of Export Import Policy, 1997-2002 (in short "the Policy"). As per terms of Para 9.2 of the Policy, a 100% EOU could import all types of goods including capital goods free of duty subject to the condition that the entire production of an EOU shall be exported. Domestic Tariff Area Sales upto 50% of the FOB value of exports were allowed subject to the payment of applicable duties and fulfilment of minimum Net Foreign Exchange Earnings as a Percentage of Exports and on prior intimation to the Customs Authorities. The assessee was granted warehousing license dated 18.1.1996 for the purpose of warehousing of duty free imported goods by the Deputy Commissioner of Central Excise Division, Ludhiana under Sections 58 and 65 of the Act for in-bond manufacturing of their export products. The assessee was importing raw materials, i.e. polyester yarn, polyester fabrics, woollen yarn, synthetic waste, acrylic fibre and acrylic tow without payment of customs duty under notification dated 3.6.1997 subject to the fulfillment of the conditions of the said notification, aforesaid license and B-17 Bond dated 11.7.2000 executed by the assessee with the Assistant Commissioner, Central Excise Division-II, Ludhiana in terms of the said notification. The respondent had executed B-17 bond in terms of notification dated 3.6.1997 which exempts goods specified therein and imported into India or procured from the public warehouse or a private warehouse appointed or licensed under Section 57 or 58 of the Act. In pursuit of a specific information received regarding selling/diverting of the duty free imported raw material by the respondent in the open market, in violation of the provisions of law, the Anti Smuggling Staff of the Customs Commissionerate, Amritsar visited the factory premises of the assessee on 27.3.2002 and conducted physical verification of the stocks of the imported raw materials and finished goods. During the scrutiny of records, it was found that the assessee has not accounted for the goods imported duty free under the notification dated 3.6.1997 against some bills of entry in their imported raw material register as well as in Form-IV register. The respondent failed to intimate the department regarding receipt of the imported goods in their factory premises. The material imported vide such bills of entry was also not found in the factory. The assessee failed to explain the whereabouts of the goods in respect of the bills of entry. As the raw material had been diverted into open market in contravention of the conditions of the Policy, notification dated 3.6.1997 and the bond executed by them, a sum of ' 2,53,07,032/- along with interest was to be recovered from the respondent and the goods were liable to be confiscated under Section 111(o) of the Act. Accordingly, a show cause notice dated 7.7.2006 (Annexure A-1) was issued to the assessee. The adjudicating authority vide order-in-original dated 19.11.2008 (Annexure A-2) confirmed the demand of customs duty amounting to ' 2,53,07,032/- from the respondent along with interest; imposed penalty of ' 2,53,07,032/- under Section 112(a) of the Act; confiscated the goods valued at ' 3,44,69,712/- under Section 111 (o) of the Act with an option to pay a fine of ' 2,00,00,000/- in lieu of confiscation and imposed penalty of ' 2,53,07,032/- upon Harbhajan Singh, Managing Director of the respondent-assessee under Section 112(b) of the Act. Feeling aggrieved by the order of the adjudicating authority, the assessee as well as Harbhajan Singh filed appeals before the Tribunal. The Tribunal vide order dated 6.7.2011 (Annexure A-3) allowed the appeals and set aside the order of the adjudicating authority. Hence, the present appeal by the revenue.;