TMI Blog2015 (10) TMI 967X X X X Extracts X X X X X X X X Extracts X X X X ..... with valuation of the goods. In the case of import, the value of the goods is CIF value and it is the transaction value between the foreign supplier and a buyer in India. Thus for clearance of goods from 100% EOU to DTA, one has to ascertain the CIF value of similar goods being imported. We find that in this particular case, the appellant has not indicated any such CIF value. They have indicated certain values and on that they have added the duty which is applicable to the normal DTA units and thus arrived at the selling price. As mentioned earlier, the correct method in the present case will be to know the CIF value of the similar goods being imported and take that as the assessable value. An amount of penalty has been imposed under Section 114A of the Customs Act. We find that it is not a case of import but it is a case of clearance from a unit located in India. The penalty can be imposed under Section 11AC of the Central Excise Act and not under Section 114A of the Customs Act. However, we note that in the show cause notice, both the sections were invoked. Moreover, the two sections are pari materia and exactly same. In these circumstances, we do not consider that the mentio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pellant is required to pay customs and excise duty liability etc. which was done some time in 2004. In between during the period 15.9.2003 to 25.9.2003, the appellant manufactured certain goods and cleared in DTA. While clearing the goods in DTA, the appellant paid the duty as per the main provision of Section 3 of the Central Excise Act, i.e. they paid duty as is applicable to a normal DTA unit. The Revenue was of the view that since the EOU has not been converted into DTA as yet, they are required to pay the duty as per clause (ii) to proviso to Section 3(1) of the Central Excise Act, i.e. the duty which is normally applicable for clearance by 100% EOU to DTA. The appellant was informed by the range Superintendent in writing. However, the appellant did not agree and continued to clear consignments on payment of the duty applicable to DTA units. Thereafter, the Revenue official seized certain goods in Bangalore from appellant No.3 who is one of the customers of the main appellant. It appears that the goods seized were not the same as were originally manufactured but had already undergone the processing. Thereafter a show cause notice was issued demanding duty of ₹ 1,79,086/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... redit Rules. He further submitted that in the impugned order, the Commissioner (Appeals) has made out a new case and has spoken of altogether different section i.e. Section 120 of the Customs Act, 1962, which had no application whatsoever in the locally cleared goods. He submitted that the confiscation of the goods is bad in law. Further, they have not redeemed the goods so far and the goods have already become bad and the department should be asked to compensate for the same. It was submitted that no penalty is imposable on appellant No.3 as he has done no wrong. 3. Learned AR, on the other hand, took us through the impugned order and submitted that in spite of repeated request by the department, appellant No.1 did not pay the duty and continued to assess the goods as per main Section 3(1). Further, appellant No.1 had also made an application to the Assistant Commissioner to execute a bank guarantee for the differential duty, which was rejected. Even then, the appellant continued to clear the goods under the main Section 3(1). Under the circumstances, it is a case of not obeying the law. Further, it was submitted that the penalty was proposed under Section 11AC of the Central E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act deals with valuation of the goods. In the case of import, the value of the goods is CIF value and it is the transaction value between the foreign supplier and a buyer in India. Thus for clearance of goods from 100% EOU to DTA, one has to ascertain the CIF value of similar goods being imported. We find that in this particular case, the appellant has not indicated any such CIF value. They have indicated certain values and on that they have added the duty which is applicable to the normal DTA units and thus arrived at the selling price. As mentioned earlier, the correct method in the present case will be to know the CIF value of the similar goods being imported and take that as the assessable value. However, in this case the clearances were made in 2003 and it will not be practically possible either for the appellant to provide similar information or for the Revenue to find out. Under the circumstances, the only way out of the situation is to take the assessable value as declared in the invoices by the appellant as the assessable value for purpose of computation of the duty which will be equivalent to the import duty applicable on such goods. Thus the duty demanded as per the sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Excise Rules, 2002 or Rule 13 of the Cenvat Credit Rules, 2002. In the present case, the goods which have been seized are not the same goods which were cleared from appellant No.1 but have already been processed. Further, the goods were not clandestinely cleared but were cleared on payment of duty. It is a separate issue that there was a dispute about the rate of duty applicable on such goods between appellant No.1 and the Revenue. We also agree with the learned counsel for the appellant that the Commissioner (Appeals) has misdirected himself into trying to invoke Section 120 of the Customs Act, 1962, which was not at all in the case, show cause notice or by the original authority. The confiscation of the goods is set aside and accordingly the redemption fine is also set aside. We also find that penalty is imposed on appellant No.3. In our considered view, there is no case for imposition of penalty on appellant No.3 as they have purchased the goods under proper invoices, received the goods and taken the credit on the basis of the invoices on which the duty had been paid. The penalty imposed on appellant No.3 is, therefore, set aside. 5. All the three appeals are disposed of in ..... 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