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2016 (9) TMI 1163 - CESTAT HYDERABAD

2016 (9) TMI 1163 - CESTAT HYDERABAD - TMI - 100% EOU - DTA sale of prawn seed - production and export of shrimp and processed shrimp - Notification 13/81-Customs - Notification 123/81-central Excise dated 02-06-1981 - whether the impugned prawn seed have been removed from the EOU into the DTA or whether they emanate from the Hatchery of M/s Magunta Exports which is not part of EOU and which has been taken on lease by the Assessee and if it falls within the former, what would be the manner and m .....

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n favor of appellant. - C/273/2006 & C/132/2007 - Final Order No. A/30661-30662/2016 - Dated:- 9-8-2016 - Ms. Sulekha Beevi, C.S. Member(JudiciaI) and Mr. Madhu Mohan Damodhar, Member(Technical) Shri S. Murugappan, Advocate for the Appellant Shri R.K. Dass, AR for the Respondent ORDER Both these appeals emanate from the same impugned order and therefore were heard together and are disposed by this common order. The parties are hereafter referred to as Assessee and Department for the sake of conv .....

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uty in terms of Notification 13/81-Customs and subsequent notification issued in this behalf. The assessee also procured indigenous goods by availing excise duty exemption in terms of Notification 123/81-central Excise dated 02-06-1981 and subsequent notifications issued thereof. 2.3 The assessee started their commercial production during 1995, though permission was obtained earlier. During 1999, the officers of the department required the appellants to provide details regarding DTA sale of praw .....

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why the imported goods should not be confiscated for improper use and duty of ₹ 3,87,66,386/- should not be recovered; why the goods locally procured and valued at over ₹ 6 crores should not be confiscated under the provisions of Central Excise Act and why excise duty of ₹ 1,06,45,596/- should not be demanded and why penalty should not be imposed on them under Section 117 of Customs Act, 1962 and Central Excise Rules. 2.5 On adjudication vide order dated 03-01-2008 the adjudic .....

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nt of fine of ₹ 1,00,000/- and imposed a penalty of ₹ 5,00,000/- under Section 117 of Customs Act, 1962 on the assessee. 3. Aggrieved by the impugned order Assessee has filed Appeal No. C/273/2006. 4. Department is also aggrieved by the impugned order and have filed Appeal No. C/132/2007. 5. On behalf of Assessee, the learned counsel Sri. S. Murugappan reiterated the grounds of appeal and in particular made the following submissions. 5.1 No where in the notice there is any proposal t .....

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seed. Any such demand would amount to demanding duty twice; thus the notice has not demanded duty on the imported as such. 5.4 Show cause notice demands duty on the prawn seed to an extent of ₹ 4,81,99,524/-. Therefore, there cannot be a presumption that show cause notice has demanded duty on the inputs used in the production of prawn seed also. Thus, the duty of ₹ 3,87,66,386/-demanded in para 10(ii) will be confined to below goods referred to in para 20(B) of the impugned order. 5. .....

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tion of the shrimp seed. Thus, the demand confirmation is outside the scope of the show cause notice and on this very ground, the demand made is liable to be set aside. 5.6 Even for making the demand as mentioned above, the department has relied upon the subsequent amendments made in the relevant customs notification and this amendment was made much after the alleged clearances took place. Hence, even otherwise, these amendments cannot be made applicable to the clearance under question. Accordin .....

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nge earnings, there is no violation committed by them and even otherwise use of these goods for production of material cleared in DTA will not constitute a violation. Therefore, the confiscation made by the department is not tenable and consequently the confiscation made and the redemption fine imposed and are likely to be set aside. 6. Countering the above submissions the learned AR Sri. R.K. Dass contended as under: i) The assessee has not produced evidence to the satisfaction of the departmen .....

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the invoice that the seed is manufactured in the hatchery of M/s Magunta exports. For these reasons, the proposals for demand of duty and confiscation of goods etc in the show cause notice are very much in order and as such the appeal of the Assessee does not have merit. 7. The learned AR prayed that for the very reasons, and also for the reasons that Assessee is liable to pay duty in terms of bonds executed by them, customs duties leviable should be collected on prawn seed if it is not an exci .....

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Hatchery of M/s Magunta Exports which is not part of EOU and which has been taken on lease by the Assessee and if it falls within the former, what would be the manner and method of calculation of duty liability. 10. The Assessee has been consistently arguing that the GTA sales of Prawn seeds effected by them during the period under dispute viz; 1994-1999 have not been cleared from their EOU; but instead were produced in a DTA unit Magunta Exports taken by them on lease. It is also not in disput .....

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view are negligible and within acceptable limits. The adjudicating authority has also ignored the submission of the Assessee during PH that they have submitted Daily sales List (DSL) signed by proper officer incharge of the coastal hatchery to indicate that the seeds were produced only in M/s Magunta Exports and they are also having Daily Production List showing seed produced in 100% EOU. It is further seen that the adjudicating authority has disregarded these and other assertions of the Assesse .....

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ad to demand 'proportionate duty on the raw material, consumables used in the production of seed cleared into DTA' which action is not supported by any of the proposals of the show cause notice. Merit is also found in the assessee contention that when the period of dispute is 1994-95 to 1998-99 duty on the inputs cannot be demanded on the basis of amendments made in notification 196/94 vide amending notification 56/2001 dated 18-05-2001. 11. In the circumstances, we are of the considered .....

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