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2015 (10) TMI 967 - CESTAT MUMBAI

2015 (10) TMI 967 - CESTAT MUMBAI - 2016 (333) E.L.T. 371 (Tri. - Mumbai) - Duty demand - Conversion from 100% EOU to DTA - Confiscation of goods - Imposition of redemption fine and penalty - Held that:- Dispute has arisen about the duty chargeable on the goods which were cleared during the period when the unit had made an application for conversion from EOU to DTA and in-principle approval for the same was given but the unit had not been converted to normal DTA unit as per the procedural formal .....

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quired to be determined in accordance with the provisions of the Customs Act, 1962. Section 14 of the Customs 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. T .....

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n 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 mention of Section 114A is fatal to the case. However, we observe that the penalty under Section 11AC can only be imposed if the ingredients provided under the said section are s .....

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the present case, the appellant had received the in-principle approval for debonding or conversion of unit from EOU to DTA. Under the circumstances, we do not consider it to be a fit case for imposition of penalty under Section 11AC of the Central Excise Act. Accordingly the penalty imposed is set aside.

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 .....

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s also set aside. - Appeal disposed of. - APPEAL Nos. E/3105 to 3107/05-Mum - Final Order Nos. A/3294-3296/2015-WZB/EB - Dated:- 29-9-2015 - Mr. P.K. Jain, Member (Technical) And Mr. S.S. Garg, Member (Judicial) Shri A.K. Chatterjee, Advocate : For The Petitioner Shri V.K. Shastri, Assistant Commissioner (AR) : For The Respondent ORDER Per: P.K. Jain Brief facts of the case are that the main appellant was a 100% EOU. On 24.7.2003 they decided to convert into a DTA unit and for this purpose, made .....

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rovision 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 .....

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ustoms Act, interest under Section 11AB. Further, the goods seized were proposed to be confiscated under Rule 25 of the Central Excise Rules. A penalty on appellant No.2 and 3 also is proposed. The case was adjudicated by the original authority who confirmed the demand (Rs.1,79,086/-), interest, penalty (Rs.1,79,086/-), confiscated the goods with an option to release the same on payment of redemption fine of ₹ 10,000/-, a penalty of ₹ 5,000/- imposed on appellant No.2 under Rule 26. .....

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s should be worked out backwards and the duty on that count be charged and not on the value shown in the invoices issued by them. The learned counsels second submission was that the penalty on appellant No.1 has been imposed under Section 114A. In this particular case, the demand is under Section 11A(1) and therefore there is no question of penalty under other Act and in support of the said contention, he quoted the judgment of this Tribunal in the case of Saheli Synthetics Pvt. Ltd. vs. CCE re .....

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No.3 on the invoices of appellant No.1. Further, he has taken the credit on the basis of the invoices issued by appellant No.1. The said goods were already processed and it was not correct on the part of the Revenue to seize such goods under Rule 25 of the Central Excise Rules or Rule 13 of the Cenvat Credit 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 .....

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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 .....

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had made an application for conversion from EOU to DTA and in-principle approval for the same was given but the unit had not been converted to normal DTA unit as per the procedural formalities which include payment of customs and excise duty on capital goods, raw material, work in progress etc. Since the EOU had not been debonded and converted into DTA unit, the appellant was required to pay the duty as per clause (ii) of proviso to Section 3(1) of the Central Excise Act. In fact, the learned co .....

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manufactured, - (i) (ii) By a hundred per cent export-oriented undertaking and brought to any other place in India, shall be an amount equal to the aggregate of the duties of customs which would be leviable under the Customs Act, 1962 (52 of 1962) or any other law for the time being in force, on like goods produced or manufactured outside India if imported into India, and where the said duties of customs are chargeable by reference to their value; the value of such excisable goods shall, notwith .....

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lue 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 C .....

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port duty applicable on such goods. Thus the duty demanded as per the show cause notice is upheld and the appellants plea to compute the value on the basis of the selling price and working out backwards is rejected. We also observe that in our view, 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 .....

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wilful misstatement or suppression of facts or contravention of any of the provisions of this Act or the Rules made thereunder with intent to evade payment of duty. We find that none of these ingredients are present in the facts and circumstances of the present case. The fact that the appellant was paying duty as applicable to normal units in India was very well known to the department official, even of clearance, so there is no question of fraud or misstatement or any such thing. In fact we al .....

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