TMI Blog2011 (3) TMI 955X X X X Extracts X X X X X X X X Extracts X X X X ..... lved, find that as per the impugned order, the assessee had discharged the export obligation attached to the impugned goods upto 1996; violation, if any, occurred after 1996 - As the export obligation attached to the impugned goods at the time of import was discharged by 1996, the goods may not be liable for confiscation under Section 111(o) of the Act on a finding that the exemption allowed at the time of import was conditional upon the EOU discharging export obligation and the same had not been fulfilled by the EOU after import - As the confiscation stands penalty under Section 112(a) of the Act is consequential and cannot be waived. - C/159/09 - - - Dated:- 17-3-2011 - Hon'ble Mr. M.V.Ravindran, Member(Judicial) Hon'ble Mr. P.Kart ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 16/9/1996 to 17/9/2001 subject to certain conditions. During these five years, the appellant had failed to fulfill the export obligation. As a result, the Development Commissioner, CSEZ, Bangalore issued a show-cause notice to the appellant. Deciding the notice, the Development Commissioner observed in the order that there was clear evidence against the firm to show that the export obligation of the unit had not been fulfilled. As against the minimum export obligation as per Exim policy norms of US $ 0.50 million or 5 times the CIF value of capital goods imported which ever was higher, the company had made exports of Rs.122.5 lakh during the five year period ending 31/3/2001. The out flow on account of import of capital goods and raw mater ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 112(a) / 114A of the Customs Act, 1962 should not be imposed on them. 4. Adjudicating the show-cause notice, the Jt.Commissioner of Customs confiscated the capital goods of value Rs.96,78,350/- u/s 111(o) of the Customs Act, 1962 and offered an option to redeem the same on payment of a fine of Rs.10 lakhs. He confirmed demand of duty of Rs.98,39,883/- along with applicable interest found due on the capital goods imported duty free under the proviso to Notification No.13/81-Cus. dt. 9/2/1981 read with Notification No.53/97-Cus. dt. 3/6/1997. He also imposed a penalty of Rs.2 lakhs on the assessee under Section 112(a) of the Act. 5. Vide the impugned order, the Commissioner(Appeals) found that the assessee had imported capital goods ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner noted that the ratio of the decision of the Tribunal in the case of CC CE, Vadodara Vs. Solitaire Machine Tools P. Ltd. [2003(152) ELT 384 (Tri. Mumbai)] applied to the instant case. He ordered that the lower authority had to quantify the assessable value of the capital goods after depreciation in 1996 as there was no offence till 1996. The value of capital goods after such depreciation, if any, was to be subjected to duty and the same should be recovered from the appellant. For non-fulfillment of the export obligation during the extended period, they would be liable for penal action proportionate to the amount of non-fulfillment of export obligation. For the purpose of fine and penalty, the lower authority had to consider the v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of payment of duty. We have also heard the ld. SDR for the Revenue. 9. On a careful consideration of the case records and submissions by both sides, we find that the Commissioner observed that there was failure in fulfilling the export obligation in respect of the capital goods involved and the Development Commissioner had punished the EOU. We note that in the Solitaire Machine Tools P. Ltd. case, found to apply to the instant case by the Commissioner(Appeals), the Tribunal had held that in terms of Notification No.13/81, the assessee was liable to pay duty on the capital goods obtained under the EOU scheme on the depreciated value and depreciation was admissible upto the date of payment of duty. 10. As regards the liability to confisca ..... X X X X Extracts X X X X X X X X Extracts X X X X
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