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Commissioner of Customs, Indore Versus M/s. CT Cotton Yarn Ltd.

2015 (10) TMI 1095 - CESTAT NEW DELHI

Demand of Duty – Textile Machinery imported - Assessee contends that ownership of machinery is with M/s TFL as per Hire-Purchase agreement, they are liable to pay duty – Machine removed under a Court order and not deliberately – M/s Vampex purchased the machine and hence liable to pay duty and assessee is further liable to claim depreciation on duty demanded.

Revenue contended that assessee is only liable to pay duty and depreciation granted is on the higher side.

Held That .....

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24-8-2015 - R K Singh, Member (T) And Sulekha Beevi C S, Member (J) For the Appellant : Smt Suchitra Sharma, DR For the Respondent : None ORDER Per Sulekha Beevi CS The Appeal No. 163/2007 is filed by Revenue challenging the impugned order whereas in appeal No. 224/2007 the assessee is in appeal challenging the very same order. For convenience the parties are referred to the status of assessee and department hereafter. 2. At the outset, it needs mention that this Tribunal vide interim order dat .....

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pending before this Tribunal. Though several notice were issued the assessee or counsel has not turned up. It is seen that notices by registered post with A/D have been issued to the assessee by marking copy to the counsel informing the hearing dates as 5.8.2015, 17.12.2014, 25.3.2014, 13.2.2014, 19.11.2013, 01.10.2013, 11.4.2013, 11.2.2013, 28.9.2012, 11.7.2012, 15.5.2012, 27.3.2012, 07.2.2011, 8.9.2011, 26.7.2011, 21.4.2011, 23.2.2011, 02.11.2010, 5.10.2010, 11.8.2010, 18.6.2010, 3.5.2010, 11. .....

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ecting the registry to get information from the High Court of Madhya Pradesh as to what is the status of the case pending before the High Court Reply was received stating that the same is pending before the High Court. Thereafter the case has come up for Regular Hearing several times has been adjourned and notices repeated to the assessee. The matter thus came up on 5.8.2015 also when none appeared for the assessee and the learned DR brought to our notice the interim order passed by the Hon' .....

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.8.2015, by producing a photocopy. The certified copy of the order of the Hon'ble Court is not produced. None has appeared for the assessee. It is seen that the Hon'ble Court had directed the Tribunal not to dismiss the matter for non-deposit of the amount as per interim order passed by the Tribunal on 22.6.2007. There is no stay in disposing the appeal on merits. This is clarified by subsequent orders dated 8.4.2015 and 13.5.2015. What is stayed is the dismissal of the appeal under Sect .....

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who was engaged in manufacture of 100% cotton yarn, purchased textile machinery (Automatic Cone Winder) in 1997. Being a 100% EOU they were entitled for duty free import of capital goods under Notification No. 53/97-Cus dated 03.06.1997. This notification imposed conditions for availing duty exemption. Sub clause (a) and (b) of Clause 5 of the said notification states that such capital goods shall not be removed to any other place without permission from Department and such permission can be gi .....

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s the departments' case that assessee did not intimate them about the court proceedings initiated by M/s TFL, or the removal of the goods by way of sale to M/s Vamptex traders. When the department came to know about removal of goods investigation was conducted and separate Show Cause Notice were issued to the assessee, M/s TFL and M/s Vamptex Traders. Original authority passed order confirming the duty demand of ₹ 33,65,344/- against assessee. Penalty was not imposed on any of the noti .....

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peal challenging the allowance of depreciation. The assessee has filed appeal challenging the levy of duty. Before parting with the narration of facts it would be necessary to state that in the impugned order the Commissioner (Appeals) has observed that the assessee may take appropriate steps, as may be necessary, to collect the duty payable from M/s Vamptex traders so that the ultimate burden of duty does not fall on them. It is also worth to mention that the show cause notices issued to M/s TF .....

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from the development Commissioner before removal of the machine from the premises. If the machine is removed, the assessee is liable to pay customs duty. 7. The contentions raised by the assessee are that:- (a) The machine was imported by filing a B/E on joint basis, by assessee and M/s TFL, as the machine was purchased under a Hire Purchase agreement. That being a H. P. agreement the ownership of the goods remained with M/s TFL. The machine was subsequently recovered by M/s TFL under a Court or .....

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aders, having purchased the machine in 'as is where is' condition and accepting the 'Terms and conditions' which specifically state that the purchaser shall be liable to pay all taxes and duties applicable; after sale of machinery to M/s Vamptex Traders, they are liable to pay the duty. (d) In any case, the machine was imported in 1998 and removed/taken away by a court order in 2001. That therefore the assessee is entitled to claim depreciation in the value in regard to duty dema .....

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he adjudicating authority confirmed the duty demand against the assessee. 9. The foremost contention raised by the assessee is that as the machine was purchased under a Hire Purchase Agreement, they are not the owner of the machine. M/s TFL being the Financier is the owner and is liable to pay the duty. Though this argument may appear to be attractive on the first blush of it, the same is unacceptable. In a Hire Purchase System, the possession of goods is transferred to the hirer by the financie .....

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sibility to pay the duty is shifted to M/s TFL does not hold any water. The liability to pay the duty arises from the bond executed by the assessee with the Department obliging to abide by the conditions in the notification. The plea that the assessee did not violate the provisions of the notification is therefore not sustainable. It is due to the act of default in installments on the part of the assessee that has resulted in recovery of possession of the machine by M/s TFL. It can be safely con .....

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NO.7 MACH....CONER AUTOMATIC CONEWINDER (TYPE MAGAZINE), more particularly described in the schedule written herein under shall be put up for sale on "as is where is "basis and the sale is subject to the payment by the purchaser of all outstanding duties (inclusive of Customs duty, if applicable) taxes and liabilities attached to the said machineries" and as per clause 13 "the purchaser shall be liable to pay all Central State, Municipal & Other Taxes, duties, levies, ces .....

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