ORDER: [PER SHRI ASHOK JINDAL]

The Revenue is in appeal against the impugned order.

2. The facts of the case are that intelligence was developed by the officers of the Directorate of Revenue Intelligence (DRI), Kolkata Zonal Unit to the effect that M/s. Jelenta Polytraders Pvt. Ltd., Kolkata, West Bengal (hereinafter referred to as "JPPL") had undertaken duty-free imports of goods such as High Density Polyethylene (HDPE), PVC Resin, LLDPE Granules, Polypropylene, LDPE etc. under the Advance Authorization (AA) and Duty Free Import Authorization (DFIA) Schemes through Kolkata Port.

2.1. It appeared to the Revenue that M/s. Kalpena Industries Ltd. (hereinafter referred to as "KIL"), the promoting company, had been shown as the supporting manufacturer and that high sea sale agreements had been entered into between JPPL and KIL in respect of the imported goods. It further appeared to the Revenue that the export obligations under the aforesaid schemes had been shown to have been fulfilled through supplies made to M/s. Tara Holding Pvt. Ltd. (hereinafter referred to as "THPL"), a 100% EOU, stated to be under the control of KIL.

3. Pursuant thereto, investigation was initiated by DRI, Kolkata. During the course of investigation, it was noticed that JPPL had imported substantial quantities of LLDPE, HDPE, LDPE, PVC Resin and Polypropylene without payment of duty under Advance Authorizations and DFIAs issued by the DGFT, Kolkata and that KIL had been declared as the supporting manufacturer in the respective authorizations. It further emerged that JPPL had obtained five Advance Authorizations and thirteen Duty Free Import Authorizations against which export obligations were stated to have been discharged by way of deemed exports effected through KIL to THPL.

4. On the basis of the materials gathered during investigation, the Revenue entertained a view that the conditions governing the aforesaid schemes had not been fulfilled and that the transactions shown as deemed exports to THPL did not correspond to actual movement of goods. In this regard, reliance was placed, inter alia, upon verification of transport documents and statements recorded during the course of investigation. It also appeared to the Revenue that certain documents relied upon for availing the benefits under the schemes had been altered or tampered with. Accordingly, the Revenue formed a view that the duty-free imported materials had not been utilized in the manner prescribed under the relevant notifications issued under the Customs Act, 1962 and the Foreign Trade Policy, thereby rendering the goods liable to confiscation and the duty foregone recoverable in accordance with law.

5. On completion of investigation, a Show Cause Notice bearing F. No. 02/KOL/APP/2013/P/JELENTA/9118-9123 dated 28.03.2015 came to be issued to (i) M/s. Jelenta Polytraders Pvt. Ltd., (ii) Shri Narrindra Suranna, CMD of M/s. Kalpena Industries Ltd., (iii) M/s. Kalpena Industries Ltd., (iv) Shri Ashis Sen, Director of M/s. Jelenta Polytraders Pvt. Ltd., (v) M/s. Tara Holding Pvt. Ltd. and (vi) Shri Tara Chand Jain, Director of M/s. Tara Holding Pvt. Ltd., proposing, inter alia, the following:-

a) Noticee No. (i) Goods valued Rs.38,93,39,975/- (Rupees thirty eight crores ninety three lakhs thirty nine thousand nine hundred seventy five only) imported as duty free goods from Kolkata Sea Port under 17 Licenses (5 Advance Authorization and 12 Duty Free Import Authorizations) liable to confiscation under Section 111(o) of the Customs Act, 1962 for not utilizing the said goods in manufacturing of export goods and thereby violating the conditions of respective notifications.

b) Recovery of duty amounting to Rs. 8,52,46,964/- (Rupees eight crores fifty two lakhs forty six thousand nine hundred sixty four only) from them under Section 28(4) of the Customs Act, 1962.

c) Recovery of interest at appropriate rate from them under Section 28AA (erstwhile Section 28AB) of the Customs Act, 1962.

d) Imposition of Pen