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TMI Blog2023 (11) TMI 916X X X X Extracts X X X X X X X X Extracts X X X X ..... ap value of obsolete raw materials. However Adjudicating authority vide order dated 24.01.2011 directed the Appellant to destroy or dispose the goods only after payment of duty on the assessable value at the time of import with interest till date of payment of duty. Aggrieved by said order, an appeal was filed by the appellant before the Commissioner Appeals. In view of the Notification No. 52/2003-Cus dated 31.03.2003, Commissioner Appeals rejected the appeal. Aggrieved by the said impugned order, present appeal is filed. 2. When the matter came up for hearing, the learned Counsel for the appellant submitted that due to rapid technological development/advancement, the imported raw material/components become obsolete and unfit for manufacture and therefore they sought permission from the jurisdictional authority from time to time to destroy the goods on payment of duty on the scrap value of the destroyed goods. The Learned Counsel also submitted that the impugned order is issued without considering the provisions of Para 6.15(b) of the Foreign Trade Policy r/w Notification No.53/2003-Cus dated 31.03.2003 which reads as:- "Capital goods and spares that have become obsolete/ surpl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... material or remnants are destroyed within the unit or destroyed outside the unit when it is not possible to destroy the same within the unit: Provided that this condition shall not apply in the case of unit engaged in manufacture and export of gem and jewellery. 4. Ld. Counsel further submitted that said condition of 8 Notification No.53/2003-Cus dated 31.03.2003 was substituted by Notification No. 34/2015-Cus dated 25.05.2015 wherein it is specifically mentioned that duty shall not be leviable. Condition of 8 is reproduced hereinbelow: "(8) Subject to the satisfaction of the said officer, duty shall not be leviable in respect of capital goods, raw material, consumables, spares, goods manufactured processed or packaged, and scrap or waste or remnants or rejects are destroyed within the unit after intimation to Customs authorities or destroyed outside the unit with permission of Customs authorities: Provided that this condition shall not apply in case of unit engaged in manufacture and export of gold, silver, platinum, diamond, precious and semi precious stones." 5. Regarding Sale of Surplus/unutilised goods, Condition No.25 reads as follows: "25. Sale of surplus/unutilis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its parts which are not required (useful) for current production and have also not been used can be destroyed outside the zone i.e. whether the goods which were imported under an earlier notification could be allowed destruction under the present Notification No. 133/94-Cus. (iii) Whether the goods which are permitted for destruction within the zones can be taken for destruction outside the zones, as the notification only provides for destruction within the zone? 2. The issue has been examined by the Board. It is clarified that action taken under the rescinded seven notifications will be deemed to have been done or taken under the corresponding provisions of the current Notification No. 133/94 and the goods which were imported under any one of the earlier notifications could be allowed destruction under present notification. Under para 7 (ii) of Notification No. 133/94-Cus., the imported goods as such may be allowed destruction and under para 7(iii), the scrap/waste obtained in the process of manufacture may also be allowed destruction. In the cases where goods cannot be destroyed within the Zone because of the safety reasons or Municipal Corporation's regulations, the Commiss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e corresponding provisions of the current Notification No. 133/94-Cus., which has rescinded all these seven notifications? (ii) Whether defective or sub-standard computers and its parts which are not required (useful) for current production and have also not been used can be destroyed out side the zone i.e. whether the goods which were imported under an earlier notification could be allowed destruction under the present Notification No. 133/94-Cus.? (iii) Whether the goods which are permitted for destruction within the zones can be taken for destruction outside the zones, as the notification only provides for destruction within the zone ? (2) The Issue has been examined by Board. It is clarified that action taken under the rescinded seven notifications will be deemed to have been done or taken under the corresponding provisions of the current Notification No. 133/94 and the goods which were imported under any one of the earlier notifications could be allowed destruction under present notification. Under para 7(ii) of Notification No. 133/94-Cus., the imported goods as such may be allowed destruction and under para 7(iii), the scrap/waste obtained in the process of manufacture ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15) E.LT 9 (SC). 11. Heard both sides. The only dispute is whether the raw materials/components procured without payment of duty under notification 52/2003-cus dated 31.03.2003 can be permitted to be destroyed without payment of duty when the goods become obsolete and unfit for manufacture. 12. As per the Circular dated 10.9.1999, the supplier of such defective/damaged or otherwise unfit for use, goods, does not insist on re-export of such goods, the same may not be re-exported subject to the condition that such goods shall be either destroyed with the permission of the Assistant Commissioner in-charge of the unit or cleared into DTA on payment of full Customs duty. Board Circular No. 60/1999-Cus dated 10.09.1999 is reproduced below: EOU/EPZ/STP units - Replacement of goods exported or imported and found damaged or defective or otherwise unfit for use Circular No. 60/99-Cus., dated 10-9-1999 [From F. No. 305/111/99-FTT] Government of India Ministry of Finance (Department of Revenue) Central Board of Excise & Customs, New Delhi Subject : Difficulty being faced by EOU/EPZ/EHTP/STP units in regard to replacement of goods exported or imported and found damaged or def ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he obsolete raw materials. Thus, the adjudication authority ought to have allowed the request of the appellant for destruction of such goods either within the unit or destroyed outside the unit when it is not possible to destroy the same within the unit without insisting for payment of custom duty especially when respondent have allowed destruction of obsolete goods subject to payment of scrap value earlier. 13. Moreover para 6.15 (b) of the Foreign Trade Policy clearly states that ----- "no duty shall be payable in case capital goods, raw material, consumables, space, goods manufactured, processed and packaged, and scrap/waste/remnants/rejects are destroyed within unit after intermission to customs authority or destroyed outside unit with permission of customs authorities". The Notification No.34/2015 has amended condition (8) of notification 52/2003 along the lines of the above clause 6.15(b) to bring parity between the FTP provisions and the customs notifications. In view of the above, it is clear that when goods are destroyed, they are not liable to duty on the original value at the time of import. 14. The reliance placed by the revenue on Santox Pvt Ltd reported in 2012 (278 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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