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TMI Blog2008 (9) TMI 264X X X X Extracts X X X X X X X X Extracts X X X X ..... had obtained EPCG licences dated 6-9-1995 and 30-1-1996 for import of second hand looms on payment of concessional rate of duty of 10% in terms of notification No. 110/95-Cus. (b) They imported the goods in 1996 and warehoused the same in the public bonded warehouse run by C.W.C. (c) They changed their mind on clearing the warehoused goods under EPCG licences and applied to the DGFT authority and Development Commissioner for treating the goods already imported under EPCG Scheme as goods imported under 100% EOU Scheme. (The import of goods under 100% EOU scheme is fully exempt from Customs Duty). (d) The Ministry of Industry granted permission for setting up of the 100% EOU by letter dated 7-8-1998. The Development Commissioner also gave ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der, the Commissioner ordered confiscation of 27 looms valued at Rs. 5,51,37,779/- under Section 111(j) of the Customs Act, but allowed redemption on payment of fine of Rs. 50 lacs within three months from the date of receipt of the said order. He also directed that if the goods were redeemed appropriate duties and other charges would be payable in respect of the said goods. 3. Learned advocate after narrating the history of the case took us through the relevant documents and made the following submissions: (a) After permission was obtained for converting the import from EPCG Scheme to 100% EOU Scheme, they wrote letters seeking permission for manufacture of the goods under bond under Section 65 using the imported goods. Instead of granti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s stipulated therein and particularly with regard to conditions of the goods as to whether they susceptible to deterioration or not and whether there is justification for delay in clearance of the warehoused. (b) On expiry of the warehousing period, the goods were deemed to have been cleared unauthorisedly from the warehouse and the duty shall be payable in terms of Section 72(1)(b) of the Customs Act. (c) In the facts of the case, confiscation of the goods was justified. 5. We have carefully considered the submission from both sides. At the outset, we note that the goods were imported in 1996 and at the time of import itself they were only second hand goods. While the litigation was going on, the goods, imported using precious foreign e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of the period permitted under Section 61. The customs duty shall be payable at the rate applicable on the date of expiry of the warehousing period. The appellant is also required to pay the rents and other charges to the concerned persons as held by the Commissioner in his impugned order. We also hold that even though Section 72 refers, in addition to demand of duty, payment of penalties, the imposition of penalty may not be attracted in the present case. 8. In the result, the appeal is, therefore, disposed of upholding the demand of duty and interest as applicable and other charges. However, the redemption fine is set aside. The appellant shall clear the goods within three months from the date of receipt of this order. (Dictated and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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