TMI Blog2023 (11) TMI 916X X X X Extracts X X X X X X X X Extracts X X X X ..... uty - It is an admitted fact that appellant vide letter dated 01.09.2010 sought permission from the Department for destruction of obsolete imported raw material and components. They have also informed that destroyed goods would be sold as scrap and duty discharged on the scrap value of the obsolete raw materials. Thus, the adjudication authority ought to have allowed the request of the appellant for destruction of such goods either within the unit or destroyed outside the unit when it is not possible to destroy the same within the unit without insisting for payment of custom duty especially when respondent have allowed destruction of obsolete goods subject to payment of scrap value earlier. In the instant case, there is no dispute that the appellant had vide letter dated 29.11.2010 had requested the Department for permission to destroy the goods that were obsolete and unfit for use and they had also agreed to pay duty on the scrap value of the goods. The Hon ble High Court in the case of COMMISSIONER OF C. EX., DELHI-V VERSUS PURE RICE LTD. [ 2007 (4) TMI 270 - HIGH COURT OF PUNJAB HARYANA AT CHANDIGARH] relying upon the Notification 60/99 dated 10.9.99 has category been h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dictional authority from time to time to destroy the goods on payment of duty on the scrap value of the destroyed goods. The Learned Counsel also submitted that the impugned order is issued without considering the provisions of Para 6.15(b) of the Foreign Trade Policy r/w Notification No.53/2003-Cus dated 31.03.2003 which reads as:- Capital goods and spares that have become obsolete/ surplus, may be exported or transferred to SEZ unit, transferred to another EOU/EHTP/STP/BTP/on payment of applicable GST and compensation cess or disposed of in DTA on payment of applicable GST and compensation cess and duties of Customs leviable under First Schedule of the Customs Tariff Act, 1975. Benefit of depreciation will be available in case of disposal in DTA only when the unit has achieved positive NFE taking into consideration the depreciation allowed. No duty shall be payable other than the applicable taxes under GST laws incase capital goods, raw material consumables, spares, goods manufactured, processed or packaged, and scrap/ waste/remnants /rejects are destroyed within unit after intimation to Customs authorities or destroyed outside unit with permission of Customs authorities. Des ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... within the unit after intimation to Customs authorities or destroyed outside the unit with permission of Customs authorities: Provided that this condition shall not apply in case of unit engaged in manufacture and export of gold, silver, platinum, diamond, precious and semi precious stones. 5. Regarding Sale of Surplus/unutilised goods, Condition No.25 reads as follows: 25. Sale of surplus/unutilised goods: 25.1 EOUs are allowed to sell surplus/unutilized goods and services, imported or procured duty free, into DTA on payment of duty on the value at the time of import/procurement and at rates in force on the date of payment of such duty, in case the unit is unable, for valid reasons, to utilize the goods. The permission for such DTA sale is given by the jurisdictional Assistant/Deputy Commissioner of Central Excise and Customs. 25.2 Unutilized goods and services may also be transferred to another EOU/EHTP/STP/BTP/SEZ unit or exported. Such transfer to another such unit would be treated as import for receiving unit. 25.3 Obsolete/surplus capital goods and spares can either be exported, transferred to another EOU/EHTP/STP/BTP/SEZ unit or disposed of in the DTA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he earlier notifications could be allowed destruction under present notification. Under para 7 (ii) of Notification No. 133/94-Cus., the imported goods as such may be allowed destruction and under para 7(iii), the scrap/waste obtained in the process of manufacture may also be allowed destruction. In the cases where goods cannot be destroyed within the Zone because of the safety reasons or Municipal Corporation s regulations, the Commissioner may permit destruction outside the Zone subject such conditions as may be prescribed by the Commissioner since this is only a procedural requirement and non-substantive in nature. 3. Pending cases may be processed accordingly and the receipt of this letter may kindly be acknowledged. 7. The Learned Counsel further submitted that the issue is squarely covered by the findings of this Tribunal in the matter of M/s. Saint Gobin Crystals reported in 2018 (364) E.L.T 1095), M/s Mac Million India Vs CC, Bangalore reported in 2008 (223) E.L.T 449 and in the case of M/s. Indian Actuators Pvt Ltd. reported in 2009 (244) E.L.T 573, where it was held that :- 3 . We have heard both sides. We find force in the submission of the appellants that sin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed seven notifications will be deemed to have been done or taken under the corresponding provisions of the current Notification No. 133/94 and the goods which were imported under any one of the earlier notifications could be allowed destruction under present notification. Under para 7(ii) of Notification No. 133/94-Cus., the imported goods as such may be allowed destruction and under para 7(iii), the scrap/waste obtained in the process of manufacture may also be allowed destruction. In the cases where goods cannot be destroyed within the Zone because of the safety reasons or Municipal Corporation s regulations, the Commissioner may permit destruction outside the Zone subject such conditions as may be prescribed by the Commissioner since this is only a procedural requirement and non-substantive in nature. (3) Pending cases may be processed accordingly and the receipt of this letter may kindly be acknowledged. 4 . In the light of the above discussion, we direct that the application for permission to destroy the obsolete goods be allowed by the appropriate authority in terms of Notification No. 71/2000-Cus., dated 22-5-2000. 5 . The appeal is disposed of in the above terms ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eproduced below: EOU/EPZ/STP units Replacement of goods exported or imported and found damaged or defective or otherwise unfit for use Circular No. 60/99-Cus., dated 10-9-1999 [From F. No. 305/111/99-FTT] Government of India Ministry of Finance (Department of Revenue) Central Board of Excise Customs, New Delhi Subject : Difficulty being faced by EOU/EPZ/EHTP/STP units in regard to replacement of goods exported or imported and found damaged or defective or otherwise unfit for use - Regarding . It has been brought to the notice of the Board by the Ministry of Commerce that EOU/EPZ/EHTP/STP units are facing difficulties in sending replacement of goods exported and found defective, damaged or otherwise unfit for use and in getting replacement of goods imported and found defective/damaged or unfit for use. 2. The matter has been examined. I am directed to say that following instructions may be followed in this regard : (A) Goods exported and found defective, damaged or otherwise unfit for use + + + + + by foreign buyer (i) The units may be allowed to make free replacement of the goods exported and found defective, damaged or otherwise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to customs authority or destroyed outside unit with permission of customs authorities . The Notification No.34/2015 has amended condition (8) of notification 52/2003 along the lines of the above clause 6.15(b) to bring parity between the FTP provisions and the customs notifications. In view of the above, it is clear that when goods are destroyed, they are not liable to duty on the original value at the time of import. 14. The reliance placed by the revenue on Santox Pvt Ltd reported in 2012 (278) E.L.T 259 (Tri.Mumbai) also does not help the case of revenue in as much as the matter was remanded for demand of duty not on the original value but on the value of the deteriorated goods. Tribunal has held that duty can be demanded only on the value of the deteriorated goods which have to be determined in accordance with sub-section (3) of Section 22 of the Customs Act. It is for the appellant to establish that the goods which they have proposed to destroy has no commercial value whatsoever and no duty liability would be involved. Therefore, the matter has to go back to the original adjudicating authority, namely, the jurisdictional Assistant Commissioner/Dy. Commissioner for consid ..... X X X X Extracts X X X X X X X X Extracts X X X X
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