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TMI Blog2017 (5) TMI 938X X X X Extracts X X X X X X X X Extracts X X X X ..... machinery and claimed exemption from Customs duty under Customs Notification No. 53/97 dated 3.6.97 for installation and use at Nagpur unit. The goods were cleared by filing two Bills of Entry and warehoused at Nagpur unit on 27.11.97. Subsequently, the appellant obtained permission from the Assistant Commissioner, Nagpur to transfer the machinery to their Raipur unit. After obtaining the said permission, the goods were shifted to Raipur and rewarehoused at the Raipur unit in April, 2000. The officers of DGCEI commenced investigation on intelligence to the effect that the appellants were misusing the benefits of exemption granted to EOU. The officers visited the Raipur unit and during the course of verification, noticed that the machinery remained uninstalled even in the month of March, 2005. The condition of machinery, which were kept outside the bonded area, were not useable. Show cause notice was issued demanding the customs duty attributable to machinery which were found uninstalled and unusable. The show cause notice was decided in the original proceedings by the Commissioner vide his order in original dated 9.2.07 in which the customs duty demand was confirmed along with impo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uent years. 3. The jurisdictional Assistant Commissioner, Central Excise, Division Raipur in his verification report dated 22.06.2001, endorsed the fact that the all imported goods / machinery were found to be intact and in an un tampered condition. 4. The entire basis of issuance of above mentioned SCN is the allegation that the appellant has violated condition no. 6 of Notification No. 53/97-Cus which states that the imported goods shall be installed in bonded area within a period of one year from its importation. During the relevant period i.e. on the date when the subject machineries were imported in the year 1997, there was no condition of prescribing any specific period for installation of imported capital goods. 5. The restriction was inserted only on 19.5.1999 by way of notification No. 65/97-Cus dated 19.5.1999 amending the Notification No. 53/97-Cus. CBEC Circular No. 30/99 Cus dated 25.05.1999, on which reliance has been placed in the impugned order, would have no application to the facts of the instant case, inasmuch as the said circular had been issued as a consequence of and was complimentary to the amending Notification No. 65/99-Cus dated 19.5.99, which amende ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e as well as procured duty free as above. The case of the appellant was under the category of procurement from private bonded ware house, inasmuch as the second hand capital goods were procured from the appellant‟s Nagpur unit. Since the appellants has failed to complete installation of the goods so procured even after a period of 5 years (up to March, 2005 the date of verification by DGCEI), they are liable to pay the Customs duty in terms of amended notification. Even in the unamended notification 53/97, in para 6, there was stipulation that the Asstt. Commissioner, Customs can demand duty in respect of goods imported under the notification which are not proved to have been used in the manufacture of goods. In the present case, goods have not been installed and consequently were not used for manufacture of goods for export and consequently even in terms of unamended provisions of notification, the customs authorities were within their right to demand the duty. 8. Both sides relied upon various case laws to support their arguments. 9. To consider the rival claims and to decide the duty demands, we consider it necessary to reproduce the relevant paragraphs of notification N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... articles for export subject to conditions prescribed therein. But after the amendment in May, 1999, exemption was permissible even for the goods which were procured from a public or private bonded ware house. In the present case, the capital goods when imported in 1997 were warehoused in the Nagpur unit. Subsequently, the appellants procured the goods without payment of duty for use in their Raipur unit. The application for such rewarehousing has been made to the relevant Central Excise and DGFT authorities and the goods have been rewarehoused in Raipur unit on 17.4.2000. It is pertinent to note that procurement and rewarehousing has been done after the date of amendment of the relevant Foreign Trade Policy as well as amendment to Notification No. 53/97 by Notification No.65/99-Cus in May, 1999. As per the amendment terms of the Notification No. 53/97, goods which are procured from another public / private bonded warehouse are required to be installed or otherwise used within the bonded premises or re-exported within a period of one year from the date of such procurement. In the present case, it is on record that goods were found uninstalled and not used even in 2005 at the time of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nce the same have been imported prior to amendment. 13. The goods in the present case have no doubt been removed from one warehouse to another. In that sense they had not yet been cleared for home consumption. Section 72 of the Customs Act provides for the proper officer to demand duty in many cases. Section 72 (1)(d) which is been reproduced as follows: "Section 72. Goods improperly removed from warehouse, etc.- (1) In any of the following cases, that is to say, - a) .......... b) ........... c) .......... d) where any goods in respect of which a bond has been executed under section 59 and which have not been cleared for home consumption or exportation are not duly accounted for to the satisfaction of the proper officer, the proper officer may demand, and the owner of such goods shall forthwith pay, the full amount of duty, chargeable on account of such goods together with all penalties, rent, interest and other charges payable in respect of such goods." In the present case, goods have been removed from one warehouse to another. However, even though the goods have not been cleared for home consumption, the same have not been accounted for to the satisfaction of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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