2020-VIL-307-CESTAT-BLR-CU

CUSTOMS CESTAT Case

Customs – EOU Unit – import of silk yarn - shortage of material during statutory audit – violation of import condition – HELD - in respect of the shortages found by the auditors, were not verified by the DRI officers physically - If any action is required to be taken under the Customs Act, 1962 officers need to verify the stock physically to allege and prove the charge of shortage. If the appellants have made any mistake under any other act, action can be taken by the officers concerned under the relevant provisions - Regarding confirmation of demand for shortage in respect of re-imported export goods, the appellants have violated the provisions of the Notification inasmuch as they could not maintain records properly; could not show the stock physically and could not show any proof of re-export. Therefore, the arguments of the appellant in this regard are not acceptable and the lapses cannot be treated as procedural. Therefore, in respect of the re-imported goods, the demand has correctly confirmed - The appellants have also argued that as the warehousing period is not over, the demand is premature - among other conditions, Notification No. 52/2003 requires the appellants “to maintain proper account of the receipt, storage and utilization of the goods.” The investigation conducted by the Revenue shows that the so-called re-imported goods were not found in the factory premises and no proper accounts of the same has also been done - the appellants have violated the conditions of the Notification and in terms of the Bond they have submitted at the time of import, they are liable to pay duty along with applicable interest - penalty under Section 114A and other penal provisions cannot be invoked when the goods were permitted to be cleared by the officers. However, the Revenue will be free to recover duty along with interest in terms of the Notification - the appeal is partly allowed

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