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2015 (12) TMI 1090 - CESTAT AHMEDABAD

2015 (12) TMI 1090 - CESTAT AHMEDABAD - 2016 (333) E.L.T. 429 (Tri. - Ahmd.) - 100% EOU - appellants failed to install Secondhand Textile Machinery (capital goods) within the stipulated time of one year, or within the extended period - Confiscation of goods - exemption under Notification No. 53/1997-Cus dated 03.6.1997 as amended by Notification No. 52/2003-Cus dated 31.3.2003 - Imposition of redemption fine and penalty - Held that:- The goods were allowed to be imported and the duty on the same .....

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rnational (2010 (6) TMI 184 - CESTAT, NEW DELHI), the issue was whether the entire premises of 100% EOU should be treated as warehouse, and whether for captive consumption within the bonded premises, ex-bond bill of entry has to be filed and duty paid. The issue in Gemini Metal Works (1984 (12) TMI 314 - MADRAS HIGH COURT) related to cancelation of license and is not relevant in the instant case. On the other hand, we find our views are fortified by the decisions of this very Bench of the Tribun .....

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y with interest would suffice the cause of justice in the instant case and confiscation of the goods and penalty on the appellant are not warranted. - Decided partly in favour of assessee. - Appeal No. : C/422/2007 - ORDER No. A/11759/2015 - Dated:- 7-9-2015 - Mr. P.K. Das, Member (Judicial) And Mr. P.M. Saleem, Member (Technical) For the Petitioner : Shri T. Vishwanathan and Shri Manish Jain, Advocate For the Respondent : Shri Alok Srivastava, Authorised Representative ORDER Per : Mr. P.M. Sale .....

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f Central Excise, Silvassa. The appellants procured/ imported capital goods viz. 144 Nos. of Secondhand Textile Machinery during the period January 2003 to February 2004 by availing exemption under Notification No. 53/1997-Cus dated 03.6.1997 as amended by Notification No. 52/2003-Cus dated 31.3.2003. The appellants installed 113 Nos. of Secondhand Textile Machinery (capital goods) out of the total 144 Nos. of Secondhand Textile Machinery procured, within one year from the date of import. The ap .....

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nfiscated the 31 Nos. of Secondhand Textile Machineries valued at ₹ 1,69,37,569/- and allowed redemption of the same on payment of fine of ₹ 10 Lakh. He also confirmed duty of ₹ 74,11,970/- along with interest and imposed penalty of ₹ 5 Lakh on the appellants. He ordered to enforce the bond for recovery of the aforesaid duty, interest and penalty. Aggrieved by the same, the appellants are before us. 2. Heard both sides. The learned counsel appearing for the appellants arg .....

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nery which was also not granted by the department. He further contended that the goods imported were warehoused and since the goods were not cleared from bonded warehouse, no duty is leviable on the same. He also submitted that there was no suppression or malafide intention on their part and therefore, imposition of penalty was bad in law. The learned counsel cited the decisions of the Honble Madras High Court in the case of Gemini Metal Works vs. UOI 1985 (22) ELT 27 (Mad.) and Tribunal in the .....

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one year from the date of import, as required under the exemption Notification No. 53/97-Cus dated 03.6.1997 3read with Notification No. 52/2003-Cus dated 31.03.2003. He also submitted that the appellant were granted extension of time to install the capital goods up to 30.06.2006 in accordance with the provisions of the notification, but they still failed to install the same. The request of the appellants dated 08.6.2006 to scrap and destroy the said goods were rejected on 20.6.2006 by the Assi .....

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nefit of exemption provided under the notification, and thereafter re-warehoused. He also cited the decision of the Tribunal in the case of Siddeshar Spinning Pvt. Limited vs. CCE, Bhavnagar 2013-TIOL-841-CESTAT-AHM in his favour. He argues that the appellant had not complied with the conditions of the notifications and therefore, they are liable to pay the duty along with interest, and confiscation of goods and imposition of penalty are justified. 4. On careful consideration of the arguments of .....

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rter executes a bond in such form and for such sum and with such security or surety as may be prescribed by the Assistant Commissioner of Customs, binding himself to fulfil the export obligations and conditions stipulated in this notification and in or under said Export and Import Policy and to pay on demand an amount equal to the duty leviable on the goods and interest at the rate of 20% per annum on the said duty from the date of duty free importation or procurement of the said goods till the .....

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ve within the said period, allow; Condition No. 3(d) (I) (i) of Notification No. 52/2003-Cus. (3) The unit executes a bond in such form and for such sum and with such authority, as may be specified by the said officer, binding himself, (d) to pay on demand- (I) an amount equal to duty leviable on the goods and interest at a rate as specified in the notification of the Government of India in the Ministry of Finance (Department of Revenue) issued under section 28AB of the said Customs Act on the s .....

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hin the said period, allow; 5. It is observed that the appellants failed to install 31 Nos. of the Secondhand Textile Machinery (capital goods) within the stipulated period of one year nor could they install the same up to 30.06.2006, the extension of time limit granted for installation of the same as per the provisions of the notification. It is their case that they could not install the goods since they could not procure the spare parts of the machine for installation of the goods. They have a .....

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te within such a short period. They had imported machinery for certain specific purpose of putting the same into production. The goods were allowed to be imported and the duty on the same was exempted for a specific purpose, as per the conditions of the exemption notification (supra) and the appellant was bound by the conditions. On failure to comply with those conditions, the goods are not eligible for the exemption provided by the said notification and they are liable to pay applicable customs .....

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arehoused premises of 100% EOU for manufacture of final goods for export, and therefore, the goods are liable to customs duty once it is found that they are not eligible for the exemption under the said notifications (supra). We, therefore, find no reason to interfere with the impugned order of the adjudicating authority confirming the demand of duty of ₹ 74,11,970/- along with interest and therefore, we uphold the same. 6. However, as brought out hereinabove, the appellant had no malafide .....

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e instant case and confiscation of the goods and penalty on the appellant are not warranted. 7. We find that the case laws cited by learned counsel are not applicable in the present case, as the facts are different in those cases. In Macmillan India Limited (supra), the goods related to Information Technology and export obligations were already met. In Paras Fab International (supra), the issue was whether the entire premises of 100% EOU should be treated as warehouse, and whether for captive co .....

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prises Limited - 2010 (256) ELT 602 (Tri. Bang.), Philips India Limited vs. Commissioner of Customs, Mumbai - 2001 (137) ELT 697 (Tri. Mum.) and Taurus Novelties Limited vs. Commissioner of Customs, Bangalore -2004 (173) E.L.T. 100 (Tri. - Bang.). Paras 7,8 and 9 of the said decision are reproduced below for better appreciation:- 7. We find that on an identical issue, the co-ordinate Bench of the Tribunal in the case of Nava Bharat Enterprises Ltd (supra) (wherein I was one of the Member of the .....

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sides. In the instant case, the appellants had submitted that they were forced to close down the business owing to problems such as lack of orders, internal competition, low prices and working capital. They had also submitted that considering these difficulties faced by the EOU, the Development Commissioner had taken a lenient view and imposed a light penalty of ₹ 50,000/- on them. The Commissioner rejected this claim of the appellant as not substantiated. We find that it is reasonable to .....

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s and they could export only a negligible quantity of 1%. Further, there is no allegation in the show cause that the appellants-importer willfully sought to avail of the benefit of Notification with a view to gain any benefit. It is not the case of the department that there was deliberate attempt to avail of the notification by making any mis-declaration. The extent of the failure to fulfill the export obligation does not matter in a situation, as seen from the records that in this case, in fact .....

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f the EXIM Policy was dealt with. We would also like to observe that the Hon'ble Supreme Court in the case of Hindustan Steel Ltd. v. State of Orissa, has held that "penalty will not also be imposed merely because it is lawful to do so. Where penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances". Following the ratio of the above decisions .....

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