9911796707
TMI Blog2004 (3) TMI 666X X X X Extracts X X X X X X X X Extracts X X X X ..... e appellants a permission for Advance DTA sales of Ascorbic Acid (coated)/Vitamin C (coated) up to a value of Rs. 1,74,72,000/-. The appellants have their licensed private warehouse at W-17, MIDC, Tarapur, Boisar Dist: Thane wherein the dutiable goods either imported or sourced indigenously for the manufacture of the finished products to be deposited for specified period without payment of duty on conditions specified in sub-section (1) of Section 59 of the Customs Act, 1962. 3. In connection with the operations of the aforesaid EOU, the appellants had already furnished B-17 (General Surety Bond) dated 10-4-2003 for Rs. 1.5 crore, separate double duty bonds for the capital goods imported between 9/94 to 11/95 which have been duly accepted by the A.C. There had been no subsequent imports of capital goods and the aforesaid double duty bonds are in force and subsisting till date. 4. In terms of Circular No. 14/98-Cus., dated 10-3-1998, the bond amount, in the case of 100% EOU, for the coverage of the liabilities under the Customs and Excise Acts, had to be equivalent to double the amount of duty calculated on the goods to be imported/procured duty free from the manufacturi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctivities were noticed warranting investigation into the import and the DTA sales of Ascorbic acid of the company. It was also noticed that the capital goods imported duty free under the 100% EOU scheme were lying unused admittedly since 1998. The power connection of the company was disconnected since 31-10-2000 for non-payment of MSEB dues of Rs. 9.53 lakhs. The water connection of the company has bean disconnected since 2/2003 for non-payment of dues of MIDC of Rs. 25,000/- (approx.). For the B-17 Bonds for a sum of Rs. 1.50 crores executed by the assessee, a surety of Rs. 1.50 crores was been given by Shri Prashant Tanna. The Solvency certificate furnished by M/s. Jajodia & Co. - Chartered Accountants did not reflect the true net-worth of Shri Prashant Tanna as out of Rs. 1.50 crores surety, shares totalling Rs. 8,16,400/- were considered by taking their face value of Rs. 10/- each, unsecured loan with M/s. Suprapti Plastics Limited for a sum of Rs. 18.62 lakhs was also considered. The capital goods of worth at least Rs 4.94 crores were imported by the assessee after taking loans from SICOM and Bank of Baroda and the same was defaulted by the assessee. As such, the unsecured loa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imports exceeds the Bond amount the unit is required to execute a fresh Bond. In the case of the assessee the bond amount has therefore been arrived based on the total duty on actual imports already effected instead of 'sanctioned' requirement. He therefore directed the assessee to execute a fresh B-17 Bond & the DTA sales Bond for a sum of Rs. 2.50 crores and Rs. 0.50 crores, respectively, with appropriate surety as per the details of calculations shown in Annexures 'A' and 'B', which were arrived at after taking into account the duty involved on the actual imports/DTA sales. He also asked the assessee to take into consideration the assessee's requirement of raw material for the next 3 months and increase the bond amounts to that extent. 6. Aggrieved by the aforesaid Order, M/s. Suprapti Plastics Limited, Tarapur, Dist : Thane have filed the present appeal, inter alia, stating that - (i) The impugned order was passed in gross violation of natural justice without taking into consideration the vital submissions made by the appellant. He has also erred in passing the impugned order, ex parte, without either issuing a SCN or affording an opportuni ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e duty bond for the importation of the capital goods. The said Circulars have been issued only with an intention to mitigate the difficulties faced by the importers in executing the doubled duty bond. The condition of double duty bond was found to be difficult to comply with and thus the said circulars were issued to mitigate the hardship faced by the EOU units, initially the condition was to execute a bond for an amount equivalent to the duty amount, but at the behest of the importers the amount was reduced to 25% of the duty foregone. Thus, the above circulars are manifestly applicable in a situation where no double duty bond has been executed by the EOU. In a situation where a double duty bond has already been executed and is valid for the importation of the capital goods no further bond can be insisted upon. Thus, the impugned order calling upon the appellants to execute a bond of Rs. 2.5 crores is erroneous and mis-conceived and also contrary to the intention of the legislature viz. to alleviate the hardship faced by the EOU. The A.C. ought to have considered Board's Circular No. 50/2000 which is the final clarification where it is clearly indicated that for fresh capital inpu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law of anti-dumping duty as goods cleared are manufactured and certificate of origin of manufactured goods is made in India; (vii) The basis on which the demand for Bond has been made is not clear and short-payment is arrived at without providing for the benefit of exemption under Notification No. 2/95-C.E., dated 4-1-1995. The appellant has correctly calculated and discharged the duty liability on the DTA clearances and the bond requirement of Rs. 50 lakhs as per the Annexure B is without any basis and arbitrary. (viii) From the various circulars, the policies, Customs Act and the Central Excise Act, it is manifest that preferential treatment is given to EOU and various concessions have been given to enable the smooth functioning of the EOU. The various circulars have been issued to alleviate the hardships faced by the EOU as the units earn foreign exchange and boost the economy. The ld A.C. in his impugned order has acted contrary to the legislative intent and called upon the appellants to discharge an obligation which has not been mandated either by the policy or the statute and acted contrary to the circulars issued. Thus, the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Central Excise and Shri Kishore Gugram, Inspector of Boisar-I Division appeared on behalf of the department. Shri Mayur Shroff, Advocate submitted that during 9/94 to 11/95 they made certain import of capital goods duty free against double duty bond executed in 9/94 & accepted by the A.C. When such bond is executed the same remains in force till the covered goods are disposed of as per Circular No. 76/99-Cus., dated 17-11-1999, clause (5). In addition to this they have given on 20-1-2000 another B-17 Bond for the raw material imported for Rs. 1 crore with surety. Thereafter they have executed an addition B-17 Bond for Rs. 50 lakhs which was also accepted by the A.C. on 10-4-2003. They have also executed a Bond for Rs. 50 lakhs for Advance DTA sales backed by surety and accepted by the A.C. In view of the above facts there was no necessity to ask them to execute fresh B-17 Bond with surety as has been directed by the A.C. in his impugned letter. He emphasised that Revenue is already secured by the existing Bonds. 8. The Officers appearing on behalf of the department submitted that fresh Bond is required under Circular No. 14/98-Cus., dated 10-3-1998 r/w Circular No. 42/98-Cus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce. There are plethora of decisions, wherein it is held that before taking any adverse action against the party, proper opportunity should be given to represent their case. Hon'ble Calcutta High Court and Hon'ble Supreme Court in the case of M/s. Balkrishna Kejriwal v. Collector - AIR 1962 Cal 460 and Indra Ramchand Bharvani v. UOI - 1992 (59) E.L.T. 201 (S.C.) held that "The conclusion of the fact finding body of statutory authority must be arrived at after giving a fair opportunity to the party. A fair hearing has two justifiable elements - the first is that an opportunity for hearing must be given and the second is that the opportunity must be reasonable." Under the circumstances, the adverse Order passed by the A.C.C. Ex Boisar-I Division deserves to be set aside. However, in view of the amendment of Section 35A(3) of Central Excise Act, 1944, I proceed to take a decision on merits of the case. 11. As per Para (4) of Circular No. 14/98-Cus., dated 10-3-1998, the CBEC has clarified to ensure that in future only one bond is taken from 100% EOUs for all purposes. In this Circular the Bond amount was stipulated to be equivalent to double the amount of duty calculated on the g ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
