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2013 (3) TMI 306 - AT - CustomsNon-discharge of duty liability on the inputs consumed for manufacturing of LPG and cleared by availing the benefit of exemption notification No. 21/2002-Cus. and Notification No. 4/2006-Central Excise - appellant herein being 100% EOU - appellant contested the show cause notice on merits of the case as well as on limitation - whether the appellant had made themselves liable for penalty under the provisions of Section 114A of Customs Act, 1962 and Section 11AC of Central Excise Act, 1944? - Held that:- It is noted that the inputs which were procured by the appellant, were consumed in an EOU, after filing in-bond bills of entry or documents like re-warehousing certificate. These documents are not disputed by the Revenue. This would mean that the goods imported or procured locally, were warehoused in the appellant’s licensed warehouse and it is admitted that inputs were not cleared as such but were consumed. At this juncture it is to note and record that, in a similar issue in the case of Paras Fab International (2010 (6) TMI 184 - CESTAT, NEW DELHI) has ruled that no duty requires to be paid if inputs are consumed that in an EOU, as it is treated as warehouse. Fine distinction drawn between private bonded house and 100% EOU are of no help to the Revenue, inasmuch as the issue on the said dispute stands answered by the Larger Bench in the case of Paras Fab International (Supra) which even Shri Mondal has also not denied. Further, the fact of payment of duty at the time of filing bill of entry for warehouse “Under Protest” will also not change the legal position that 100% EOU is required to pay duty only at the time of clearances of warehoused goods for home consumption. Thus the above ratio would apply in full force to the case in hand, as it is undisputed that the inputs procured by appellant, on which department has foregone duty, was consumed in the EOU for manufacturing of LPG and said LPG was sold to Public Sector Units. There is no allegation of removal of inputs as such in the entire case records. In the case in hand, it is undisputed that appellant themselves has discharged the duty foregone along with interest, on their own. There was no intimation or letter from departmental authorities directing them to do so. Thus the action of the appellant in keeping informed the departmental authorities about the availment of exemption notification for LPG, filing returns by the appellant who is an EOU, would mean that they had no intention to suppress material facts. This fact of filing returns indicating entire transactions of EOU is not disputed by Revenue authorities. Thus there was no need to issue any show cause notice to appellant as the duty liability either Customs or Central Excise is the same as has been calculated by the appellant & consequently authorities have no authority to initiate proceedings for recovery of penalty See COMMISSIONER OF CENTRAL EXCISE AND SERVICE TAX Versus M/s ADECCO FLEXIONE WORKFORCE SOLUTIONS LTD [2011 (9) TMI 114 - KARNATAKA HIGH COURT] Thus the adjudicating authority has committed an error, in invoking the provisions of Section 114A of the Customs Act, 1962 and Section 11AC of the Central Excise Act, 1944 for imposition equivalent amount of penalties as indicated in his order as appellant had definitely not suppressed any material information from the department as regards the consumption of inputs procured, on which the duty liability was forgone by the Revenue and as also clearance of final products to DTA- in favour of assessee.
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