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2022 (3) TMI 1316 - AT - Central Excise100% EOU - Permission to debond the unit - allegation of irregular clearance of unutilized/surplus raw material in excess of the permissions sought from the Customs Authorities - violation of the Foreign Trade Policy - HELD THAT:- The appellant had sought to debond and was permitted to debond. The debonding was allowed by the Development Commissioner after the Jurisdictional Assistant Commissioner has confirmed in writing to him that no Central Excise or Customs Duty are pending from the appellant and they have been duty paid. The audit objection raised by CERA does not indicate how it had come to conclusion that there was a short payment of ₹ 139.58 Lakhs and that the appellant had cleared goods in excess of the permission granted by the Customs Authorities. A perusal of the letters issued by the Customs officers shows that no limit – whether in terms of quantity or value was fixed or specified in either of the letters. If the allegation is that goods over and above these were cleared by the appellant without paying duty there must be evidence that: (a) that goods were cleared in excess; and (b) no duty was paid on such clearances - There is no evidence either in the audit report or in the show cause notice, which was issued on the basis of the audit report with respect to either of the above. The appellant had sought the details from the Commissionerate by filing an application for information under the Right to Information Act and received a reply dated 02.11.2018 signed by the Central Public Information Officer - the clarification makes it abundantly clear that the Department has no idea as to on what basis the demand has been raised and has no documents to support the demand at all. The show cause notice raising a demand only on the ground that “audit said that you have short paid duty” with not even a vague attempt to explain how the demand was calculated cannot be sustained. The inescapable conclusion is that the demand has been confirmed on some figment of imagination not supported by any facts or documents. Such a demand cannot be sustained and needs to be set aside - the demand of interest and imposition of penalty also cannot sustain - appeal allowed - decided in favor of appellant.
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