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2022 (2) TMI 552 - AT - Customs100% EOU - served from India scheme (SFIS) - Recovery of duties of customs foregone on imported raw materials and duties of central excise foregone on domestic procurement of raw materials - benefit of exemption under N/N. 34/2006-CE dated 14th June 2006 - HELD THAT:- The appellant was required to discharge duties of central excise in accordance with proviso to section 3 of Central Excise Act, 1944 on clearance of goods into the ‘domestic tariff area (DTA)’ and that obligation thereto was construed by them as having been duly complied with on supply to holders of ‘scrips’ entitled to duty-free procurement of goods intended for use in providing eligible services. N/N. 34/2006-CE dated 14th June 2006 does not provide for extending the extension of the benefit of exemption to goods manufactured by ‘100 % export oriented units (EOU)’. Consequently, the clearance of goods has been effected by the appellant without payment of applicable duties. Considering that the procurement of ‘raw materials’ – both imported and domestic – had been without payment of duty, against notification no. 52/2003-Cus dated 31st March 2003 and no. 22/2003- CE dated 31st March 2003 issued under Customs Act, 1962 and Central Excise Act, 1944, the clearance of goods against debit of ‘scrip’ is legalized only by recovery of the duties so forgone which is the primary component of the order of the original authority affirmed in the impugned order. There is no finding in the order of the original authority holding the goods liable to confiscation; the imposition of penalty under section 112 of Customs Act, 1962 is without authority of law. Neither is there any finding on the confiscability of goods under rule 25 of Central Excise Act, 1944 and the imposition of penalty thereunder is, therefore, without authority of law. The appeals is allowed to the extent of setting aside the penalties while the demands of duty along with applicable interest is upheld - appeal allowed in part.
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