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TMI Blog2014 (12) TMI 1171X X X X Extracts X X X X X X X X Extracts X X X X ..... s attached to the Preventive unit, made a surprise visit and during the stock checking, the shortage of finished goods was detected. A show cause notice dt.05.06.2000 was issued proposing the demand of Customs duty of Rs. 11,00,055.00 along with interest and penalty under Section 28(1) of the Customs Act, 1962 for clandestine removal of finished Grey Fabrics, Rejected Grey Fabrics etc. The adjudicating authority confirmed the demand of duty along with interest and imposed penalty of equal amount of duty under the Customs Act, 1962. The Tribunal by Final Order No.C-II/836/WZB/2004, dt.19.02.2004, set aside the impugned order and held that the nature of duty levied on goods removed from 100% EOU is Excise duty and confirmation of duty demand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Representative for the Revenue reiterates the grounds of appeal filed by the Revenue. He submits that the adjudicating authority has rightly confirmed the demand of Customs duty on the raw materials which were utilized in the manufacture of final product. He has seriously raised objection in respect of setting aside of the entire amount of penalty imposed under Section 11AC. It is contended that the Commissioner (Appeals) upheld the demand of Central Excise duty of Rs. 11,00,055.00 on clandestine removal of goods and therefore penalty of equal amount under Section 11AC would be imposable. 5. On perusal of the impugned order, I find that the first show cause notice dt.31.01.2001 was issued proposing demand of Customs duty of Rs. 11,00,055.0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... permitted in DTA will be accordingly reduced. This issue has been decided by the Tribunal in favour of the assessee on a number of precedent decisions, holding that the value of deemed export should be included while determining the FOB value of export, based on which DTA clearances are permitted. However, in this case, the assessee is not in appeal before us. The duty on finished goods stands demanded on the ground that the same is in excess of the permissible limit for the purpose of DTA clearance. The department s claim is to the effect that the raw material used in such finished products cleared in DTA should be treated as not used for the intended purposes and the duty on import should be demanded. We do not agree with this view. In t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld not apply in the tax matters. But, I agree with the findings of the Commissioner (Appeals) in other issues in so far as the demand of duty on raw materials cannot be sustained when the demand was raised on the final product. This view is supported by the decision of the Tribunal in the case of M/s Sanjari Twisters (supra) which is upheld by the Hon'ble Supreme Court. 10. I find force in the submissions of the ld.A.R. in so far as the setting aside of entire amount of penalty under Section 11Ac of Central Excise Act 1944. Commissioner (Appeals) accepted that the clandestine removal of the final product involving demand of duty of Rs. 11,00,055.00. On a query from the Bench, ld.A.R. submits that the respondent has not filed any cross obje ..... X X X X Extracts X X X X X X X X Extracts X X X X
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