JUDGMENT

Arijit Pasayat, J.-Customs authorities question correctness of the judgment rendered by the Customs Excise and Gold (Control) Appellate Tribunal, West Regional Bench at Mumbai (hereinafter referred to as the CEGAT ) setting aside the order passed by the Commissioner of Customs (Airport) confirming demand of duty and penalty. Background facts in a nutshell are as follows:

2. Show cause notice was issued to the respondents alleging shortage of gold and diamonds, capital goods and unauthorized usage of capital goods. It is to be noted that the show cause notice was issued on the basis of certain intelligence gathered regarding infraction of various provisions of the Customs Act, 1962 (in short the Act ) and Customs Rules, 1966 (in short the Rules ), the EXIM policy and violation of conditions of certain Notifications on the basis of which the respondents had availed benefits. The purported action was in terms of Sections 111(d), 111(j), 111(l), 111(o), 111(m), 112 (a), 112(b), 113(d), 113(i), 114(i) and 114(A) of the Act. The premises of the respondents M/s. B.V. Jewels and M/s B.V. Star were searched. Both the units were situated at plot No. 55 of Santacruz Electronics Expo