JUDGMENT
S.S. Sekhon, Member (T)
1. These 4 appeals are against order of the Commissioner of Central Excise & Customs, Surat. The Appellants are engaged in sizing of yarn. The officers, on their visit, found certain quantities of imported yarn in the process of manufacture; 3 months after this visit, they seized the same, coming to the conclusion that the goods were of foreign origin and of smuggled nature. The Show Cause Notices issued, was adjudicated by the Commissioner. In the mean time, the seized goods were ordered to be released on Bond by the Honourable High Court of Gujarat. The Adjudicator vide the impugned orders enforced the Bond conditions and demand duty under Section 28(1) from the persons from whose possession the goods were seized and were found by him to be liable for confiscation. He also imposed, an equivalent, penalty under Section 114A of the Customs Act on the manufacturer appellants herein. Penalties under Section 112(b) was determined against the other appellants.
2. We have heard both sides and find, prima facie, the reason to seize the goods, since they were smuggled, is doubtful; to be entertained in the minds of the a reasonable person. The goods under seizure are no longer notified under Chapter IVA of the Customs Act. We also find that the direction of confirming and demanding duty under Section 28(1), on confiscation is not sustainable. The demand in such case should have been made under Section 125(2) as held by the Honourable Supreme Court in the case of Commissioner of Customs (Import), Mumbai v. Jagdish Cancer and Research Centre, [2001 (132) ELT 257 (SC) at 261 para 11]. As for the imposition of penalty under Section 114A, similarly, role of the manufacturer is to be examined in detail to establish whether the appellants herein, before us, are liable for a penalty under Section 114A. We, therefore, do not find adequate reasons, at this prima facie stage to conclude that the appellants on whom the duty demand and penalties under Section 114A are imposed, are liable for the same. As regards to the penalty under Section 112(b), we find from the order, that the Commissioner has relied upon and arrived at the finding that there was an admission on the part of these Directors, to have dealt with the smuggled yarn. The perusal, at this prima facie stage, of the statements and the material in the Show Cause Notice does not indicate that this finding of the Commissioner is factually correct.
3. In view of our findings, we do not find any reasons to insist on any pre-deposit of the duty and penalties as arrived at in this case. In view of our findings, we waive the pre-deposit of duty and penalties in full and admit these appeals to be placed for hearing, in due course. Ordered accordingly.
(Pronounced in Court)