Judgment:
1. The above appeals arise out of the order of the Commissioner of Central Excise and Customs, Surat confiscating 2356.595 metric tonnes of Crude Calcium Borate valued at little over Rs. 2.23 crores imported by M/s Nariman Point Chemicals Industries Pvt Ltd (hereinafter referred to as NPCI) with an option to redeem the goods on payment of fine of Rs. 1.20 crores, confirming customs duty of Rs. 63,35,660/- together with interest and imposing penalties under section 112(a) as under.1. NPCI Rs.15.00 lacs2. Shri J K Rai, Vice President of NPCI Rs.10.00 lacs3. Central Warehousing Corporation Rs.2,0004. Shri P C Bhatt, Jr Superintendent, CWC Rs.2,0005. Shri B R Thakkar, Superintendent of Central Excise & Customs. Range-III Rs.2,0006. Shri R K Sharma, Inspector of Central Excise and Customs, Range-III Rs.1,000 2. The case of the Department in a nutshell is that NPCI, after clearing a total quantity of 6700 MTs of Crude Calcium Borate without payment of Customs duty under bond for re-warehousing in the Public Bonded Warehouse brought 2356.595 metric tonnes of Crude Calcium Borate to their factory premises at Umbergaon without filing an ex-bond Bill of Entry for home consumption and without payment of Customs duty. Thus they rendered the goods (2356.595 MTs) liable to confiscation and the individuals concerned and NPCI have rendered themselves liable to penalty.
3. None appeared for the importer in spite of notices. Hence, we have heard Ld. Consultant for Shri J K Rai, P C Bhatt, B R Thakkar and R K Sharma (on behalf of the other appellants) and Ld. DR, Shri K Srivastav and perused the records. We agree with the Ld. DR Shri K K Srivastav and perused the records. We agree with the Ld. Dr that the goods have been rendered liable to confiscation, as the importer had not obtained any order for clearance of the goods in question for home consumption from a proper Officer, nor discharged the Customs duty liability before diverting the goods to their factory. The offence has been made out and it is not relevant that as to whether the reason for diversion of goods to their factory due to lack of space in Central Warehousing Corporation (CWC) or otherwise. In other words, if there was sufficient space to store the goods in the CWC was not available, the goods should have been taken to the factory of the importer on payment of customs duty. The impugned goods are correctly held liable to confiscation.
However, considering the fact, that the goods were temporarily stored in the factory premises and have not been utilized by the importer in production and considering the totality of the facts and circumstances, we reduce the fine to Rs. 20 lakhs and penalty imposed upon the importer to Rs. 2 lakhs. Since the duty demand has penalty imposed upon the importer to Rs. 2 lakhs. Since the duty demand has been paid, interest is not payable. Penalty imposed upon Mr. K Rai is justified in view of the fact that he had taken the goods knowing that such diversion without payment of duty would render the goods liable to confiscation. However, we reduce the penalty imposed upon him to Rs. 1 lakh.
4. In regard to penalties imposed upon Shri P C Bhatt, Jr.
superintendent, CWC, Umbergaon, Shri B R Thakkar, superintendent of Central Excise & Customs, Range-III, Umbergaon and Shri R K Sharma, Inspector of Central Excise & Customs. Range-III, Umbergaon under Section 112(a) of the Customs Act, 1962, we observe that penalty under Section 112 (a) is not imposable. At best they could have been penalized under Section 112(G). This apart the circumstances under which bonded goods were allowed to be stored in non-bonded premises call for a lenient view. It is not that a penalty under Section 112(h) is mandatory. The Officers have taken the decision just to ease the situation and not with any malafides. In view of this, we do not find sufficient reason to sustain the penalties imposed upon the above persons. The quantum of penalties imposed by the Commissioner is an indication that the persons concerned have committed a major irregularity. We therefore, set aside the penalties imposed upon the above persons.