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2019 (5) TMI 1362 - AT - Customs100% EOU - demand of Customs Duty on imported POY - case of the department is that PTY covered by the above consignments did not reach the premises of EOUs and were diverted in DTA - HELD THAT:- The duty on finished goods (PTY) has already been demanded under the proviso to Section 3(1) of the Act, on the ground that the same did not reach the premises of EOUs and were diverted in DTA. From the adjudication proceedings initiated against the above EOUs, it transpires that the imported goods were consumed as per the requirement of the impugned notification and thus, no duty can be demanded on raw material used in the manufacture of such finished goods. Confiscation of POY - HELD THAT:- Since the conditions of the notification dated 03.06.1997 has not been contravened. Material available in the case record proves the fact that the POY were used for the intended purpose and there was no contravention of post import condition. Even otherwise, the imported POY was not available for confiscation at the time of initiation of show cause proceedings, and as such - no redemption fine can be imposed in the absence of goods being available for confiscation. There is no reason to uphold the impugned order as no duty can be demanded on the inputs as no violation has been brought out on record vis-à-vis raw material consumption in EOUs for the required purpose. Further, the impugned order imposing redemption fine and penalties on the appellants cannot also be sustained for judicial scrutiny. Appeal allowed - decided in favor of appellant.
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