TMI Blog2010 (2) TMI 533X X X X Extracts X X X X X X X X Extracts X X X X ..... 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. - C/316/2008 - 569/2010 - Dated:- 24-2-2010 - S/Shri M.V. Ravindran, Member (J) and P. Karthikeyan, Member (T) Shri Varadarajan, Advocate, for the Appellant. Shri V. Raja Ram, DR, for the Respondent. [Order per : M.V. Ravindran, Member (J)]. - This appeal is directed against the Order-in-Appeal No. 21/2008-Cus. (B), dated 31-1-2008. 2. The brief facts of the case are that the appellant herein had purchased parts and accessories of Granite Machine, Edge cutting machines, Caliberating machine, Forklift etc. from M/s. A.K. Trade Links, Bangalore. An investigation was carried out by the authorities. On the completion of the investigation, it was found by the authorities that M/s. Alpha Rich Granites (P) Ltd. (hereinafter as EOU) had imported many items by availing benefit of exemption of Customs Notification No. 52/2003-Cus., dated 31-3-2003 and Central Excise Notificati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5) E.L.T. 182 (Tribunal) = 2004 (62) RLT 891 (ii) CCE v. Ravishankar Industries - 2002 (150) E.L.T. 1317 (iii) Essvee Polymers v. CCE - 2004 (165) E.L.T. 291 (iv) New India Dyeing and Finishing Mills - 2004 (165) E.L.T. 316 (v) Nav Bharath Paper Ltd. - 2004 (165) E.L.T. 564 (vi) CCE v. Velavan Spinning Mills - 2004 (167) E.L.T. 91 (vii) Dekon India v. CCE - 2004 (169) E.L.T. 290 (Tribunal) = 2004 (62) RLT 1004 (viii) CCE v. Sumangala Steels - 2004 (175) E.L.T. 364 (Tribunal) = 2004 (63) RLT 69 (ix) Ramashyama Papers - 2004 (168) E.L.T. 494 (Tribunal) = 2004 (63) RLT 130 (x) Premium Moulding Pressing - 2004 (65) RLT 14 3.2 It is the submission that the learned Commissioner (Appeals) has erred in holding the view that the appellant purchased the goods knowing its tainted nature. It is his submission that the said findings are incorrect as it is on record that the appellant had procured the goods from M/s. A.K. Trade Links, who is a local seller. It is his submission that the confiscation of the said goods was ordered by the lower authorities without considering the fact that the appellant is a bona fide purchaser and has purchased the same a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , Mumbai - 2007 (211) E.L.T. 80 (Tri.-Mumbai). He would also submit that duty liability is to be discharged as it is proved that goods were removed without following procedures. For this purpose, he would rely upon the decision of the Hon'ble High Court of Mumbai in the case of Poona Health Services v. CC, ACC, Mumbai - 2009 (242) E.L.T. 335 (Bom.). 5. In rejoinder, the learned Counsel would rely upon the decision of the Hon'ble Supreme Court in the case of Mohan Meakin Ltd. v. CCE, Kochi - 2000 (115) E.L.T. 3 (S.C.) for the proposition that action to initiate fresh proceedings against bona fide purchaser of the impugned goods for the value is unjust and hence, not sustainable. He would also submit that the decision of the Tribunal in the case of V.X.L. India Ltd. v. CC, Mumbai - 2000 (122) E.L.T. 710 (Tri.) has upheld by the Hon'ble High Court of Mumbai and Supreme Court clearly laid down the principle that duty has to be demanded only from the importer of the goods, and resorting the provisions of Section 125(2) of the Customs Act demanding duty from a person other than importer, would not be proper. 6. We have considered the submissions made at length by both sides and perus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es having rejected the plea of benefit of depreciation, only on the ground that the machineries were not installed in the EOU and were not used. We find from the O-I-O, it is clearly recorded that the said machineries were put to use and the EOU had manufactured and cleared finished goods for exports during the year 2004 and 2005, in partial discharge of their export obligation. This being a fact which is undisputed, the findings of the authorities as to machineries were not put to use, is incorrect. In view of this, the depreciation in accordance with law is available to the person who is ready to discharge the duty liability. We uphold the appropriate duty liability on the machineries subject to the reworking out/re-quantifying the value after depreciation, in accordance with law. For this limited purpose of re-quantification of the duty liability, we remand issue back to the Adjudicating Authority. As regards the confiscation of the goods under Section 125 of the Customs Act, 1962, we find that the show cause notice which is issued to the EOU directed them to show cause as to : "(i) Why the capital goods/machinery and consumables imported duty free valued at Rs. 2,24,27,1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irected only the EOU to show cause as to why the goods be not confiscated. It is undisputed that the appellant is owner of the said goods. If he is the owner of the goods having purchased it legally from M/s. A.K. Trade Links, show cause notice should have directed the appellant to show cause as to why the goods be not confiscated under Section 125 of the Customs Act, 1962. We find that the provisions of Section 124 of the Customs Act are very clear in this regard. We may reproduce the said Section : "SECTION 124. Issue of show cause notice before confiscation of goods, etc. - No order confiscating any goods or imposing any penalty on any person shall be made under this Chapter unless the owner of the goods or such person - (a) is given a notice in [writing with the prior approval of the officer of Customs not below the rank of a Deputy Commissioner of Customs, informing] him of the grounds on which it is proposed to confiscate the goods or to impose a penalty; (b) is given an opportunity of making a representation in writing within such reasonable time as may be specified in the notice against the grounds of confiscation or imposition of penalty mentioned therein; an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the case of goods in respect of which the value stated in the entry made under this Act or in the case of baggage, in the declaration made under section 77 (in either case hereafter in this section referred to as the declared value) is higher than the value thereof, to a penalty [not exceeding the difference between the declared value and the value thereof or five thousand rupees], whichever is the greater; (iv) in the case of goods falling both under clauses (i) and (iii), to a penalty [not exceeding the value of the goods or the difference between the declared value and the value thereof or five thousand rupees], whichever is the highest; (v) in the case of goods falling both under clauses (ii) and (iii), to a penalty [not exceeding the duty sought to be evaded on such goods or the difference between the declared value and the value thereof or five thousand rupees], whichever is the highest.]" It can be seen from the provision of Section 112(a) that penalty can be imposed on any person for improper import of the goods for a commission and omission, which would under the goods liable for confiscation under Section 111. Admittedly, the goods were not imported by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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