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2015 (4) TMI 315 - CESTAT NEW DELHI100% EOU - Waiver of pre deposit - goods were written off - Duty exemption under notification no.52 /03- Cus dated 30.1.2003. and 22/03-CE - Goods not used for intended purpose - penalty under Section 112, 114 A and 117 - Held that:- 100% EOU is a bonded area, in respect of which a private bonded licence is issued. Thus a 100% EOU is bonded warehouse and in respect of the goods stored in the bonded warehouse, the duty liability would arise only when the goods have been cleared from the warehouse. Just because the certain inputs either imported free of customs duty or procured domestically free of central excise duty have not been used for manufacture of the goods, and had been scrapped, the duty liability would arise only when the goods have been cleared by the EOU into DTA . In the show cause notice, there is no allegation that the inputs written off had been cleared by the appellant company into DTA . However, the show cause notice has been issued only on the basis that certain goods procured free of customs duty or free of central excise duty were not used in the manufacture of the goods for export, or but were written off on becoming the obsolete and for this reason, in terms of the provisions of the notification no.52 /03- Cus and 22/03-CE, the duty would be payable on these goods so written off. There is no allegation in the show cause notice that the goods in respect of which the duty has been demanded had been cleared into DTA . In our view, therefore, duty cannot be demanded in respect of the goods which had been written off. The question of payment of duty would arise only when the goods are cleared into DTA or EOU is allowed to be debonded and is converted into DTA unit, at the time of which, the EOU is required to pay duty on the entire stock of duty free raw materials and capital goods and the stock of finished goods, but this is not the case here. We, therefore, hold that the appellant have prima facie case in their favour . Accordingly, the requirement of pre-deposit of duty demand, interest and penalty by the appellant company and the requirement of pre-deposit of penalty by Shri Rakesh Kumar Vohra , Managing Director and Shri Manish Gaur, Manager (Commercial) is waived for hearing of their appeals and recovery thereof is stayed. - Stay granted.
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