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2010 (10) TMI 882 - AT - CustomsConfiscation - Penalty - Circular No. 21/95-Cus., dated 10-3-95 - Notification No. 13/81- Cus., dated 9-2-1981 - Held that:- As decided in Delta World Tele Systems v. Commissioner of C. EX., Pune-III reported [2008 (3) TMI 66 - CESTAT MUMBAI] the Tribunal vacated the demand of duty and order of confiscation of warehoused goods seized from an EOU as premature since duty could be demanded on warehoused goods only on their removal from the warehouse. The issue involved in the instant case is also nonfulfillment of export obligation. Capital goods had not been removed from the warehouse clandestinely or otherwise. We find that failure on the part of MBPL was that it had not used the capital goods procured under EOU scheme for manufacture and export of software. In such a situation, it was mandatory that the Commissioner obtained clearance from the Development Commissioner before initiating action against the EOU. The proceedings contrary to the binding Circular of CBEC is not maintainable. The impugned order is liable to be set aside. As there is no dispute that the impugned goods were seized from a warehouse licensed under Section 65 of the Customs Act. Duty can be levied and collected on such goods only on their removal from the warehouse. Goods had been seized when the period allowed to fulfill export obligation was yet to expire. In the instant case, therefore, the demand of duty, interest and order of confiscation vide the impugned order are liable to be set aside as premature following the above decision. Accordingly we set aside the impugned order. MBPL shall pay duty as offered by them in accordance with law - penalty deleted too.
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