ORDER
T. Anjaneyulu, Member (J)
1. These applications are filed for stay for grant of waiver of pre-deposit and stay its recovery under Section 129 E of the Customs Act, 1962, by the appellants.
2. On intelligence, the Officers of Customs Division, Surat, seized truck No. GJ-5U-3234 with 8786 Kgs. of imported Polyester Yarn valued at Rs. 7,02,880/- loaded at the premises of M/s. Goyal Synthetics (P) Ltd. (100% EOU), Unit No. 2, Block No. 100/A & B, Mota Borasara, Kim, without any duty paying documents. In the follow up action, the Officers searched the premises of the appellant company and found shortage of 14,896 kilograms of imported yarn. Shri Vijay Prakash Pandey, Authorised Signatory of the company, stated that out of 14,986 kilograms of imported yarn, 4,240 kilograms were lying in the factory, 8,786 kilograms were loaded in the truck and remaining 6,200 kilograms have already been cleared from their unit illicitly without payment of Customs duty. Thereafter, the Officers seized the imported Polyester Yarn weighing 8,786 kilograms valued at Rs. 7,02,880/- on the reasonable belief that the same were offending in nature and liable to confiscation under the Customs Act, 1962.
3. Show Cause Notices dated 18.03.2002 were issued to the appellant company and others.
4. The adjudicating authority vide his Order-in-Original dated 08.09.2003 ordered for confiscation of the seized goods and imposed redemption fine of Rs. 50,000/- under Section 125 of the Act as the goods had been released provisionally. He confirmed demand of Customs duty amounting to Rs. 2,93,696/- leviable on 8,786 kilograms of imported yarn and Rs. 2,07,253/-leviable on 6,200 kilograms of imported yarn cleared clandestinely. The duty was paid by the appellant company. The seized truck was confiscated under Section 115(2) of the Act and a fine of Rs. 15,000/- was imposed under Section 115 of the Act. Other penalties were also imposed as shown in the Order-in-original.
5. The appellants preferred appeals before the Commissioner of Customs (Appeals), Ahmedabad. The order of confiscation under Section 111(j) and (o) and imposition of redemption fine under Section 125 is upheld. Confiscation of vehicle under Section 115(2) of the Act is also upheld. Imposition of penalty under Section 112(a) on the authorized signatory, Shri Vijay Prakash Pandey and Director of M/s. Goyal Synthetics Pvt. Ltd., Shri Rajesh Shrikishanji Goyal, are also upheld. The penalty imposed on the owner of the vehicle is also upheld. Further, the Commissioner of Customs (Appeals) set aside the demand and confirmation of duty under Section 28(1), read with Section 72 of the Act by the officers attached to Commissioner, Customs, Ahmedabad, in respect of the goods cleared clandestinely from EOU not functioning under his jurisdiction is held to be without jurisdiction. For the same reason, imposition of penalty under Section 28AB of the Act is also set aside. Hence these appeals.
6. The Registry reports that the Department has not filed any appeal challenging the findings of the Commissioner of Customs (Appeals), where he set aside part of the Order-in-Original.
7. The appellants rely upon the following cases:-
1. Godrej Soaps and Ors. v. CCE, Mumbai – 2004 (65) RLT 449 (CESTAT-LB);
2. Bakeman’s Home Products Pvt. Ltd. and Ors. v. Collector of Customs, Mumbai – 1997 (21) RLT 602 (CEGA).
The law on the point – when demand of duty gets dropped on any account, penal provisions cannot survive and confiscation of goods, which is penal in nature, cannot be upheld under Section 11AC of the Central Excise Act, 1944, read with Rule 173Q of the Central Excise Rules, 1944.
8. Following the principles held in the aforesaid decisions, we are of the view that the appellants have made out a strong prima facie case and are entitled for waiver of pre-deposit amount. Accordingly, pre-deposit amount is waived and its recovery is stayed.
9. Applications are disposed off in the above terms.
(Pronounced in Court)