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2012 (12) TMI 312 - AT - Customs100% EOU - Issuance of Show cause notice without consultation with the Development Commissioner - held that:- As per the Board’s circular, the Revenue can issue show cause notice for protecting interest and the adjudication order has to be passed after the Development Commissioner has given a finding as to whether the 100% EOU has fulfilled their export obligations or not. In the instant case, there is a clear finding by the Development Commissioner that the appellant had failed to fulfil the export obligations and the adjudication order has been passed after the order of the Development Commissioner in this regard - Decided against the assessee. As regards the indigenously procured goods, both the capital goods and the raw materials have been procured in terms of Notification No. 1/95-C.E., dated 4-1-1995. However, the demand of duty has been computed on the basis of provisions of Notification No. 52/03-Cus., dated 31-3-2003 in terms of para 3(ii) of the said Notification in respect of imported capital goods and raw materials/consumables. As regards the indigenously procured capital goods and raw materials the duty demand has been made in terms of condition (4)(b) of Notification No. 22/03-C.E., dated 31-3-2003. Both the Notifications No. 52/03-C.E. and 22/03-C.E., both dated 31-3-2003 came into force on 31-3-2003 and they have only prospective application and the provisions of these Notifications cannot be made applicable to goods imported during the period 1994-97 and procured during the period from 1995-97 in respect of indigenous goods. On this ground alone the demand of Customs duty on the imported goods and the demand of Excise duty in respect of indigenously procured goods are not sustainable and are liable to be set aside. In the impugned order, an amount of Rs. 40,34,232/- confirmed in the order of the Deputy Commissioner mentioned above and recovered by way of tender has been reduced from the total demand of duty on raw materials. Therefore, issue of demanding any duty on raw materials/consumables unused in the manufacture of export goods does not arise at all. the case of raw materials which are consumed in the manufacture of goods which have been exported, the question of demanding either Customs duty or Excise duty do not arise at all as the goods have been used for the purpose for which they were procured. Duty after warehousing period after allowing depreciation on capital goods - During the material period if the capital goods have been put to use, the appellants were entitled for depreciation as prescribed in Board’s Circular No. 43/98-Customs, dated 26-6-1998 on the used capital goods. In the instant case, from the records it is seen that the commercial production commenced in April, 1996 and the production was completely stopped in July, 1999 and, therefore, for this period, the appellant is certainly entitled for the depreciation on capital goods. The liability to pay duty on capital goods would arise only when the goods are removed from the bonded premises or when the goods are deemed to have been removed when the warehousing period expired. In the light of the Apex Court’s decision in the case of Kesoram Rayon v. Commissioner of Customs, Calcutta [1996 (8) TMI 109 - SUPREME COURT], the duty on capital goods will have to be demanded at the rate of duty prevalent on 20-9-2003 on the depreciated value of the capital goods. In respect of indigenously procured capital goods/raw materials/consumables, the duty demand will have to be made in terms of the provisions of Notification No. 1/95-C.E., dated 4-1-1995 as amended. Matter remitted back to the adjudicating authority for re-computation and quantification of duty demands in accordance with law as it stood at the relevant time of import of capital goods/raw materials/consumables and at the time of procurement of indigenous goods in terms of the Notifications under which these goods were procured.
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