TMI Blog2012 (11) TMI 517X X X X Extracts X X X X X X X X Extracts X X X X ..... ligation and value addition during the first five year block period and achieved positive NFE during the second five year period. Thus non-fulfilment of the conditions of notifications under which the goods are obtained duty-free does not arise at all. Consequently, confiscation of goods under Section 111(o) of the Customs Act, 1962 cannot be upheld as also the imposition of penalty under Section 112(a) Customs Act, 1962 - Duty on the capital goods can be demanded only after grant of depreciation on the capital goods at the rate prevalent on the date of expiry of the warehousing licence - duty on the depreciated value of capital goods at the rate of duty prevalent on the date of debonding - matter remanded back to the original adjudicating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on No. 1/95-C.E., dated 4-1-1995. During the said period, the appellant exported goods worth Rs. 115.28 crores thus achieving and surpassing the value addition norm of 22% prescribed in the LOP and they also cleared goods in the DTA worth Rs. 11.51 crores. Thus, during the first 5 year block period of 1997-98 to 2001-02 the appellant fully achieved the export obligation cast on them. The permission was subsequently extended for another 5 years commencing from 2002-03 and during this period they were permitted to import capital goods worth US $ 19,14,000/-, raw materials worth US $ 3,90,06,000/-, spares and consumables worth US $ 22,44,00/- and their export obligation was fixed at US $ 5,44,50,000/-. However, during this period the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... customs duty demand of Rs. 1,66,67,244/-, along with interest thereon. He further held that goods valued at Rs. 2,24,11,957/- are liable to confiscation under the provisions of Section 111(o) of the Customs Act and in lieu thereof imposed a fine of Rs. 20,00,000/-. The Commissioner also ordered recovery of Central Excise duty of Rs. 92,84,664/-. He further imposed a penalty of Rs. 10,000/- under Section 117 of the Customs Act, Rs. 10,00,000/- under Rule 173Q/209A of the Central Excise Rules, 1944. He also imposed a penalty of Rs. 50,000/- on Shri Ashok Dalmia under Section 112 of the Customs Act and penalty of Rs. 25,000/- under Rule 209A of the Central Excise Rules, 1944. Further, he cancelled the warehousing licence given to the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 83,085/- towards customs duty and an amount of Rs. 3,90,658/- towards excise duty. On receipt of the show cause notice, they had made an application before the Hon ble Settlement Commission which was admitted by the Settlement Commission. However, the Settlement Commissioner, vide order dated 14-1-2008 did not settle the case but sent back the case proceedings to the adjudicating authority on the ground that there were no legal issues involved in the matter and it is a question of debonding of the unit. 3.1 The learned counsel also relies on the judgment of the Tribunal in the case of Nav Bharat Enterprises Ltd. v. Commissioner of Central Excise, Guntur reported in 2010 (256) E.L.T. 602 wherein it was held that when the capital goods have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... material which are lying in stock, at the rate of duty prevalent at the time of payment of duty on the original value of importation. As far as capital goods are concerned, what can be demanded is the duty on the depreciated value of capital goods at the rate of duty prevalent on the date of debonding. As regards the goods lying in the job-worker s premises as also on the finished goods manufactured, the duty demand will be sustainable only to the extent of excise duty leviable on the said products at the time of debonding. In the instant case, we notice that the duty demands have been confirmed in respect of raw materials and consumables consumed and utilised in the manufacture of goods which have been exported during the period from 1997 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of depreciation on the capital goods at the rate prevalent on the date of expiry of the warehousing licence. In the facts and circumstances of the case, we find that this is not a case warranting imposition of penalties at all as there is no deliberate intention to evade duty. 6. With these directions, we remand the case back to the original adjudicating authority for reconsideration of the matter afresh and re-computation of the duty in terms of the direction given above and in accordance with law. Needless to say, whatever duty liability has already been paid by the appellant should also be taken into account and the duty demand, if any, should be reduced to that extent. Further, the appellant should also be given sufficient opportun ..... X X X X Extracts X X X X X X X X Extracts X X X X
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