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2010 (2) TMI 533 - AT - CustomsEOU - The issue involved in this case is regarding the liability to duty on goods, which were purchased by the appellant from M/s. A.K. Trade Links. It was found by the authorities that appellant had imported many items by availing benefit of exemption of Customs Notification No. 52/2003-Cus., dated 31-3-2003 and Central Excise Notification No. 22/2003-C.E., dated 31-3-2003. The said 100% EOU had subsequently cleared all the said machineries, without payment of duty from the 100% EOU, without seeking any permission from the authorities. On completion of investigation, lower authorities issued a show cause notice to the said EOU directing them to show cause as to why duty be not been demanded on the capital goods and other goods cleared from the factory premises without payment of duty and also issued the show cause notice to the current appellant for imposition of penalty under Section 112(a) of the Customs Act, 1962. Held that - their clearance from EOU has to be under proper procedure, with permission from authorities and on payment of duty foregone. However, on such duty liability, assessee is entitled to benefit of depreciation on valuation, especially where use of machinery in manufacture of finished goods is not in dispute. Notice could not be liable to penalty.
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