TMI Blog1999 (6) TMI 487X X X X Extracts X X X X X X X X Extracts X X X X ..... materials were to be installed/used in the zone or re-exported within a period of one year from the date of importation; that the unit also procured capital goods from DTA free of Excise Duty availing the benefit of erstwhile Notification No. 5/86-CE dt. 28.1.1986; that under the provisions of the aforementioned notifications, the unit executed General Bonds separately for raw materials and capital goods binding it to use them as stipulated under the said notifications; that as against the export obligation of ₹ 1,150 lakhs for the first five years stipulated in the aforesaid letter of approval, the unit could effect exports worth ₹ 57 lakhs only; that the last export made was in the month of Nov. '94; that the unit failed to use the said imported raw materials for the purpose of export production within a period of one year from the date of import as stipulated under the aforesaid notification No. 339/85; that the raw material imported free of duty under the said Notification No. 133/94 was found unutilised by the unit for more than two years; that the capital goods imported as well as procured from DTA free of duties as mentioned in para I above were found unused ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... electricity and LPG connections; that on this account there was delay in production; that various export orders had to be cancelled due to continued uncertainty and inordinate delays in procuring LPG connections; that on 19.6.1991, that Director of the noticee company was kidnapped; that this fact was widely reported in the media; that the foreign collaborators lost interest in the affair of the project; that in 1993, China introduced very cheap thermometers in the international market; that this adversely affected the prices of thermometers all the worldwide; that the noticee company incurred huge losses and became sick; that they moved a reference application before BIFR for its rehabilitation which was still pending; that the goods are still lying in the zone; that the Department had misinterpreted the provisions of Section 61 of the Customs Act as the same is not applicable in the case of EPZ unit which are a separate category; that a SCN was issued prematurely since at the time of issue of the notice the appellant's unit had not completed five years; that it is only the Asstt. Commissioner of Customs who was competent to issue the SCN and not the Commissioner of customs; t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otification shall be deemed to have been done or taken under the corresponding provision of Notification No. 133/94-Cus or 126/94-CE. It was pleaded that only such action taken under the old notification would survive as are supported by corresponding provisions in the new notification. It was submitted that there was no clause in the new Notification i.e. Notification No. 133/94-Cus corresponding to Clause VII of old Notification No. 339/85 specifying any time limit for utilization of goods within one year etc. It was submitted that Notification No. 133/94-Cus and 126/94-CE in force on the date of issue of SCN do not provide for payment of duty so long as goods remain within the zone and are utilised for the purposes other than the purposes specified in the Notifications. It was also submitted that there was no allegation in the SCN alleging any unauthorised use of goods or unauthorised removal of goods outside the zone. It was submitted that the admitted position was that the raw materials and capital goods were still lying in the factory of the appellant. It was further contended by the ld. Consultant that the ld. Commissioner has given a finding that the violation of condition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssions of both the sides. The first issue that has been raised is that SCN in the instant case was issued on 26.9.1996 and that on 26.9.1996 Notification No. 339/85 was not in existence as the same was rescinded and that Notification No. 133/94 dt. 22.6.1994 replaced Notification No. 339/85. It was argued for the appellants that in Notification No. 133/94, there was no provision corresponding to provision (vii) of Notification No. 339/85. 7. We have perused Notification Nos. 339/85 and 133/94. Under Clause 5 of exemption notification No. 133/94, it has been inter alia stipulated: 5. The importer satisfies the Development Commissioner of the Zone that the goods so imported have been used for the purposes specified in Clauses (a) to (d) or for any other purposes specified in Export-Import Policy and in this notification. We further note that Clause (a) of Notification No. 133/94 provide that the goods shall be exempted when imported into India a) for the production or manufacture of articles for export out of India. Thus, it is very clear that exemption on imported capital goods and raw materials would not be available if the goods have not been used for production or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the prescribed value addition duty on the imported goods becomes payable and therefore, the contention of the appellant that there is no corresponding provision in Notification No. 133/94 for demand of duty is not correct. Similar position arises when we examine Notification 126/94. In Clause (6) of Notification 126/94 it has been provided: 6. The user industry satisfies the Development Commissioner of the zone that the said goods have been used for the purposes specified in Clauses (a) to (d) or for any other purposes specified in the Export-Import Policy and in this notification. Reading Clause 6 along with the order of the Additional Director of Foreign Trade and the policy provision in para 117. We hold that in Notification No. 126/94, there is a provision for demanding duty in the circumstances stated above and therefore, the demand of duty in terms of Notification No. 133/94 for Customs Duty and 126/94 for Central Excise Duty is there and the duty demand is, therefore, sustainable in law. 8. We also note that the contention of the appellant is that there has been no violation of even Notification No. 339/85 because the goods were duly installed/used in the Export Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The importer satisfies the Development Commissioner of the Zone that the goods so imported have been used for the purposes specified in Clauses (a) to (d) or for any other purposes specified in Export Import Policy and in this notification. Thus, the demand arises only when the Development Commissioner of the Zone makes recommendation and therefore, the demand shall have to be raised in terms of this. It can also be said about the notification issued on the Central Excise side which is Notification No. 126/94. This demand has been confirmed in terms of the Notification. The assessments or clearances in these cases were governed by the specific provision of the Notifications. The notifications relied upon the satisfaction of the Development Commissioner in regard to condition (a) to condition (d). 11. The Ld. Consultants raised arguments on the jurisdiction of the Commissioner who adjudicated the case. It was submitted that in terms of Notification No. 25/92 dt. 9.10.1992, the Central Board of Excise Customs empowered Collectors for purposes of investigation and adjudication by assigning certain cases. They submitted that no order had been placed on record authorising Custo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cisions, where the Board has already assigned the work in an identified EPZ such as FALTA, NOIDA to Commissioner of Customs keeping in mind physical proximity of the facility to a particular customs Commissionerate or any other consideration such orders would not be disturbed immediately and the existing arrangement would continue. d) in the case of facilities under the jurisdictional control of a particular Commissioner where both customs and central excise cadres are working under the same Commissioner, for example Vizag Goad the work of 100% EOUS/EPZS would be handled as per the instructions contained in (a) above. e) where the jurisdiction of the Commissioners of Customs (P) is concerned, as the jurisdiction would be concurrent with some Central Excise Commissionerate, the control may be exercised by the Central Excise Commissionerate. This is mainly to allow Commissioner of Customs (P) to concurrence on Customs Preventive work. If the existing arrangements of control is with CC (P) the change over may be made w.e.f. 1.1.1996. The Chief Commissioner may after standing the staffing pattern issue suitable orders for readjustment of staff between the officers of CC (P) and C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it has been specifically authorized that normally, the work of 100% EOU/EPZ Units will be handled by the staff of the jurisdictional Commissioner of Customs or Commissioner of Central Excise as the case may be . Further it has been set out in this letter that the Board has examined the matter in detail and observed that with the passage of time the 100% EOU/EPZ have come up in the interiors of the country far removed from the port areas which have traditionally been the areas of Customs operation. At the same time the nature of work in the 100% EOU/EPZs involves both Customs/Central Excise Laws and procedure. Therefore, having regard to the totality of operations of the 100% EOUs/EPZs Units and keeping in mind the necessity that in the long run any work whether Customs or Central Excise should be handled by jurisdiction commissionerate and facilitating the administration of these units at present, the matter of jurisdiction has been decided as follows: a) normally, the work of 100% EOU/EPZ units will be handled by the staff of the jurisdictional Commissioner of Customs or Commissioner of Central Excise as the case may be. The above position makes it clear that the Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant did not get fair chance to defend their case in regard to penalty. Therefore, the order imposing penalty is set aside. 15. It was also contended before us that the cut off date for depreciation allowing has been arbitrarily arrived at. It has been provided in the scheme that the depreciation will be admissible from the date of commercial production. We note that in this view of the matter, there has not been any arbitrary decision in fixing the date for calculating depreciation. 16. Another point that was argued before us was that Customs Duty or withdrawal of exemption will arise only from the date of de-bonding. We find that the Department produced before us letter No. 4/9/90-Prej/11226 dt. 3.12.1996 from the Asstt. Development Commissioner wherein it has inter alia been stated that: I am directed to say that the performance of unit has been reviewed and the Board of Approval in principle debonding of their unit in Noida Export Processing Zone in terms of para 117 of Export Import Policy 1992-97 subject to the following conditions: 1. Applicable Customs Excise duties would be paid on the imported and indigenous capital goods, raw materials, components, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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