Customs Appeal No. 25 of 2015. Case: Ig Petrochemicals Ltd. Vs Commissioner of C. Ex. and Cus., Belapur. Bombay High Court

Case Number:Customs Appeal No. 25 of 2015
Party Name:Ig Petrochemicals Ltd. Vs Commissioner of C. Ex. and Cus., Belapur
Counsel:For Appellant: Shri Karan Adik with Hussein Bengali i/b M/s. Jayakar and Partners, Adv. and For Respondents: Shri A.S. Rao with Jitendra B. Mishra, Advs.
Judges:S.C. Dharmadhikari and Dr. Shalini Phansalkar-Joshi, JJ.
Issue:Central Excise Act, 1944 - Section 11AC; Customs Act, 1962 - Section 114A
Citation:2016 (338) ELT 17 (Bom.)
Judgement Date:June 06, 2016
Court:Bombay High Court


  1. This appeal by the assessee challenges the order passed by the Customs, Excise and Service Tax Appellate Tribunal dated 7th August, 2014. By the order under challenge, the Tribunal dismissed the appeal of the appellants and confirmed a demand of duty as also penalty.

  2. In challenging such an order the counsel for the appellants would submit that the questions of law proposed at page 8 are substantial questions of law. It is submitted that the Tribunal could not have taken any cognizance of non-payment of customs duty as that cannot be made subject matter of proceedings under Section 11AC of the Central Excise Act, 1944. Secondly, and without admitting the above, the Tribunal should not have confirmed a penalty when there is an invitation by the appellant itself in writing so as to enable the Departmental officials to come and inspect the records and verify and scrutinize the same.

  3. Thirdly and importantly what the Tribunal has failed to notice is that there was a clear argument of any lack of mens rea or deliberate or intentional act on the part of the appellants to evade customs duty. The appellants had cleared other capital goods imported by it under the EPCG Scheme on payment of concessional duty and had intended to include the present capital goods also. However, bearing in mind the huge number of capital goods only a small portion was left out, that could not be taken to be a deliberate or intentional act so as to subject the appellants to penalty.

  4. Reliance is placed in support of the above contentions on the judgments of the Hon''ble Supreme Court of India and this Court.

  5. It is undisputed that the appellants were a 100% export oriented unit. They carried on business of manufacture of excisable goods and equally exported them. They applied for setting up another plant for manufacture and export of the product and they were granted permission. They commenced commercial production in the year 2000-2001 in which year they were granted a status as "Star Export House" by the Central Government. Thereafter, the appellants invoked clause 6.18 of the Foreign Trade Policy 2004-2009 and sought to de-bond from its 100% EOU status. The appellants addressed a letter to the Development Commissioner dated 4th June, 2008, followed by another letter signifying its intend to de-bond. The appellants while seeking such permission sought to debit their imported/indigenous goods as procured duty free into the EPCG/Advance Authorisation Scheme in terms of the Foreign Trade Policy. They state that they had made this fact...

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