9911796707
TMI Blog2015 (4) TMI 315X X X X Extracts X X X X X X X X Extracts X X X X ..... hereof such as Overview IU , PU , Interface, Populated PCB, etc. The appellant had been procuring capital goods and raw materials by importing the same without payment of duties of customs under notification no.52 /03- Cus dated 31.03.2003 as amended or from domestic sources without payment of excise duty under notification no.22 /03- CE dated 31.03.2003. An audit was conducted of the records of the appellant unit during period from 29.09.2010 to 22.10.2010 and in course of audit, the balance sheets for the financial years 2007-08, 2008-09 and 2009-10 along with other records were examined. The offices were of the view that the appellant in terms of their balance sheet for the financial years 2007-08, 2008-09 & 2009-10, had written off of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct, 1962 and Section 11 AC of the Central Excise Act, 1944 on the appellant company; and (c) imposition of penalty under Section 112 and 117 of the Customs Act, 1962 and Rule 26 of the Central Excise Rules, 2002 on Shri Rakesh Kumar Vohra , Managing Director and Shri Maniesh Gaur, Manager (Commercial) of the appellant company. 2. The above show cause notice was adjudicated by the Commissioner vide order-in-original dated 31.03.2013 by which the Commissioner - (a) confirmed the customs/central excise duty of Rs. 5,42,54,238 /-against the appellant company under Section 28 of the Customs Act, 1962 and under proviso to Section 11 A(1) of the Central Excise Act, 1944 read with conditions of B-17 Bond executed by the appellant company before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of as Rs . 13,41,62,899/-, that the provision for writing off was made in the books of accounts as per the prudent Accounting Policy and in order to reflect the financial position of the company and the same were book entries and do not represent the actual value of the inputs/raw materials, which were scrapped and written off, that thus, the very basis of the show cause notice is wrong, that the Commissioner has erroneously proceeded on the basis that the value of the inputs/raw materials written off represents the value of the obsolete import/goods scrapped and written off, that in reply to the show cause notice, it was submitted by the appellant that writing off of the goods was only due to damage, breakage, defective inputs during the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inputs so damaged and rejected works out to Rs. 1.75 % of the total inventory of the inputs purchased during the relevant period, that no duty is payable on the remaining quantity of inventories, as the same was wrongly mentioned as written off from the books of accounts, that in any case, no duty is payable as inputs are procured free of duty and stored in the bonded warehouse and in case of goods stored in the bonded warehouse, the duty becomes payable only on the clearances of the goods from the warehouse, while in this case neither there is any allegation nor there is any evidence that the goods, in question, had been cleared by the appellant company, that in any case, the duty demand for the period 2008-2009, 2010-2011 raised vide sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Excise Act, 1944. 7. We have considered the submissions from both the sides and perused the records. The appellant are a 100% EOU engaged in the manufacture of data projector and parts thereof for export. They procure the components and raw materials either through imports without payment of customs duty under notification no.52 /03- Cus or procure domestically free of central excise duty under notification no.22 /03-CE. The entire duty demand against the appellant is based on the allegation that during the period from 2007-2008 to 2010-11, the appellant company as per their balance sheet for these years had written off the inputs/raw materials either procured free of central excise duty under notification no.22 /03-CE or procured free of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r there is any allegation nor there is evidence to show that those inputs have been cleared by the appellant and that in respect of the goods stored in a bonded warehouse, the duty liability arises only when the goods have been cleared from board. 8. A 100% EOU is a bonded area, in respect of which a private bonded licence is issued. Thus a 100% EOU is bonded warehouse and in respect of the goods stored in the bonded warehouse, the duty liability would arise only when the goods have been cleared from the warehouse. Just because the certain inputs either imported free of customs duty or procured domestically free of central excise duty have not been used for manufacture of the goods, and had been scrapped, the duty liability would arise onl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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