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2017 (9) TMI 1276 - AT - CustomsQuantification of duty - redemption fine - penalty - non-fulfillment of export obligation - production and export of polished Granite Slabs, Tiles and Monuments - In terms of the LOP, the assessee have to achieve a minimum export obligation of NFEP of 40% for a period of 10 years. Only because this obligation was not achieved, the Development Commissioner on 23.02.2005, imposed penalty of ₹ 2,00,000/- and finally on 29.05.2005 had cancelled the LOP - whether the duty liability confirmed against the assessee is in order or otherwise? Held that: - when the capital goods, tools etc. have been obtained and used by the assessee right from 1988, till permanent closure of the factory in July 2002, and, subsequent cancellation of LOP on 02.09.2005, it would be unjust and unfair to deny depreciation for the period of four years exposure to natural elements as also for wear and tear that would have resulted due to their extensive use. It is also noted that machinery available in the factory premises had been placed under seizure on 29.08.2006. It is also not the case that assessee had siphoned off capital goods etc. and that they were not found as on the date of seizure - for the purposes of determining the duty liability in respect of both imported and indigenously procured goods, depreciation for the period from their import/procurement, upto the date of cancellation of the LOP and the duty liability should be calculated accordingly. The matter is therefore once again remanded to the adjudicating authority, however only for the limited purpose of requantifying the duty liability - matter on remand. Penalty u/s 112 (ii) of Customs Act, 1962 - Held that: - considering that travails faced by assessee, in particular, the fact that while having not fulfilled export obligation in toto, they have however achieved NFEP of 82.69% and 96.21% for the relevant periods, as also the fact that the dispute has resulted in protracted legal proceedings, the penalty should be reduced to ₹ 25,00,000/-. Confiscation and penalty upheld - appeal allowed - decided partly in favor of appellant.
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