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2016 (11) TMI 6 - CESTAT BANGALORE

2016 (11) TMI 6 - CESTAT BANGALORE - TMI - 100% EOU (STPI unit) - leasing out the duty-free goods in violation of the relevant customs and central excise Notifications - Redemption fine - Penalty - Notifications No.52/2003-Cus. as well as Notification No.22/2003-CE dated 31.3.2003 - Held that: - some of the conditions of the Notifications stand violated in the process of leasing of the premises and the goods, such transfer of goods have taken place only to other STP units - It is also pertinent .....

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duty liability along with interest stands already paid by the respondent - waiver of redemption fine and penalty confirmed - Decided against the revenue. - C/CO/55/2011 in C/433/2006-DB, C/433/2006-DB - Final Order No. 20998 / 2016 - Dated:- 21-10-2016 - Shri S. S. Garg, Judicial Member And Shri V. Padmanabhan, Technical Member Shri N. Jagadish, AR For the Appellant None For the Respondent ORDER Per V. Padmanabhan The present appeal is directed against the Order-in-Original dated 9.12.2005 passe .....

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heir premises containing the bonded duty-free goods both imported as well as indigenous. While leasing out, the respondents had transferred the duty-free goods on Inter Unit Transfer (IUT) basis for use by the lessee STP unit. The Customs Authorities took the view that respondents had contravened the provisions of Notifications No.52/2003-Cus. as well as Notification No.22/2003-CE dated 31.3.2003 inasmuch as the arrangement of transferring duty-free goods on IUT basis was not permissible under l .....

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He further held that the goods are liable to confiscation under Section 112(a) of the Customs Act, 1962 read with Rule 25 of the Central Excise Rules, 2002, inasmuch as the respondent leased out the duty-free goods in violation of the relevant customs and central excise Notifications. However, he took a lenient view and refrained from imposing redemption fine and penalty on the respondent. 2. Revenue has filed an appeal against the impugned order on the ground that the Commissioner ought to hav .....

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been transferred to other STP units on IUT basis which is permissible under the provisions of Foreign Trade Policy as well as the relevant Notifications. Consequent upon the transfer of capital goods to another EOU, the second EOU will assume the export obligation and there is no revenue loss to the Government. (ii) They have also pleaded that there was no ground to order confiscation of the goods or to impose penalty on the respondent since the sharing of duty-free equipment like DG sets, poll .....

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tions. They have also bonded such goods in their premises as required under the Notifications. The dispute has arisen with the customs authorities detecting that the respondent have leased out their STP premises along with the duty-free procured equipments to other STP units. In the impugned order, the learned Commissioner has upheld the duty demand on the goods which stand already paid by the respondent. The interest on the customs as well as excise duties also stands paid up by the respondent. .....

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g to the owner of the importing unit and located in the same compound or nearby premises for the purposes of development of software and export thereof. The Central Excise Notification No.22/2003 also makes a similar provision. Both these Notifications permit this, subject to the approval of Commissioner of Customs/Central Excise. In the impugned order, the learned Commissioner has recorded the finding that the leasing of the STP premises along with the equipments procured duty-free to other STP .....

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