TMI Blog2024 (3) TMI 365X X X X Extracts X X X X X X X X Extracts X X X X ..... weeks time deposited the necessary and the requisite duty/taxes on 29.03.2005 and 30.03.2005 under intimation of Revenue, and also furnished the details of duty payment and execution of bond to the Assistant Commissioner, Nellore Division. In the meanwhile, Development Commissioner had issued no due certificate on 04.11.2004 for conversion of existing EOU Scheme into EPCG Scheme. Thereafter, after delay of several months, no dues is issued by the Jurisdictional Commissioner on 03.01.2006. All throughout the period from April 2005 to 3, January 2006, the appellant was pursuing the Excise Department to issue necessary no objection/no due certificate which was issued after much delay on 03.01.2006. Thereafter, the appellant was allowed exit finally from the 100% EOU scheme to switch over to EPCG scheme, from the date of discharge of its duty liability i.e. 30.03.2005 in terms of para 6.16(d) of FTP read with para 5.4 of HBP 2004-09. We find that DGFT who are the competent authority have allowed the de-bounding from 100% EOU to switch over to EPCG Scheme with effect from 30.03.2005 and admittedly had discharged all the dues as assessed by the excise/customs department, being pre-condi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 100% EOU unit was set up in the year 1995 in terms of the letter of permission granted by the Secretariat of Industrial Approvals in the Ministry of Industry, Department of Industrial Development, New Delhi vide No. PER:471/(1993)EOB/409/93 dated 03.12.1993. 3.3 Pursuant to the above and letter of permission the 100% EOU obtained the necessary Private Bonded Warehouse License under Section 58 of the Customs Act. 3.4 The Appellants submit that in addition to export of the products manufactured by them, they were also selling the manufactured goods to other 100% EOUs, which was in turn used by them in further manufacture. These clearances made to other 100% EOUs were also considered by the Development Commissioner, VSEZ, Visakhapatnam, towards discharge of export obligations. 3.5 In terms of the relevant provisions of the EXIM policy 1992-97, 1997- 2002 and 2002-2007, the Appellants applied to the Development Commissioner, VSEZ, Visakhapatnam from time to time for granting necessary approval for clearance of a certain portion of the manufactured excisable goods viz., Hydrogen Peroxide into the DTA, on payment of applicable duties. The Appellants accordingly undertook DTA sales of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .03.2005 Consequent to exit from the EOU scheme, the Range Officer assesses the Bills of Entry for payment of Customs and Central Excise Duty on imported and locally procured goods. Further directions were issued to pay interest on the differential duty paid due to price escalation in respect of DTA sales made during the perod May, 2004 to October, 2004 7. 30.03.2005 Appellant submits copies of challans evidencing payment of Customs Duty and Excise Duty on capital goods, on raw material consequent upon de-bonding along with:- (1) Bank Guarantee of Rs.22.00 lakhs towards confirmed/unconfirmed (2) Bank Guarantee of Rs.4.00 lakhs towards duty suffered against imported capital goods converted into EPCG goods; (3) Undertaking for land building; (4) Undertaking for confirmed/unconfirmed payments; (5) Bond for Rs.13,27,400/- towards duty suffered on capital goods on account of conversion into EPCG Scheme 8. 09.04.2005 Appellant contests requirement of payment of duty on one item of capital goods imported into EOU namely Heat Recovery Boilers, which is subject matter of Show Cause Notice issued on 24.03.2005 9. 09.04.2005 Appellant request for issue of the No Objection Certificate without ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vention of Notification No. 23/2003-CE dated 31.03.2003 with an intention to evade payment of duty. 5.3 The Appellants have violated Condition no. 3 of Annexure to the LOP and also Condition no. 12 of B-17 Bond executed by them in respect of clearance of goods into the DTA from April 2005 to 11.01.2006. 5.4 Pursuant to the above allegations, it is alleged that the Appellants, being a 100% EOU are liable to pay the total aggregate of all customs duty amounting to Rs. 6,12,93,229/- on the Hydrogen Peroxide cleared from April 2005 to 11.01.2006 under the provisions of Notification No. 23/2003-CE dated 31.03.2003 as amended, read with the conditions of the LOP and B-17 Bond executed, and also under the proviso to Section 3(1)(b) of the Central Excise Act, 1944. Reply to Show Cause Notice 6. The Appellants contested the allegations set forth in the Show Cause Notice by filing a reply. 7. After granting an opportunity of personal hearing, the Commissioner has passed the impugned order confirming the proposals in the Show Cause Notice as stated in para 1 (supra). 8. Aggrieved by that part of the impugned order, the present appeal is filed on the following grounds amongst others: SUBMISSIO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner, Nellore Division, Nellore. 8.10 In the meanwhile, the Development Commissioner of ESEZ had issued a No Dues Certificate on 04.11.2004 for conversion of the existing EOU into the EPCG Scheme. 8.11 From the list of dates and events furnished above, it would be evident that during the period from April 2005 to 22.11.2005, the Appellants had written numerous letters to their jurisdictional Assistant Commissioner for issue of necessary No Dues Certificate . Finally, on 03.01.2006 the jurisdictional Assistant Commissioner informed the Development Commissioner vide letter C.No. IV/16/57/2003-T2 dated 03.01.2006 that the Appellants had executed undertaking and Bank Guarantee with valuation and paid all the amounts due on 29.03.2005 and 30.03.2005 for the purpose of de-bonding and no dues are pending with the Department for the purposes of de-bonding/exit from the EOU Scheme. 8.12 The Development Commissioner, VSEZ vide letter dated 12.01.2006, after taking note of the above facts issued an order cancelling Green Card after taking note of the fact that the Appellants had fulfilled their obligations under the EXIM policy and the Foreign Trade Policy. 8.13 The Development Commissioner, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the unit has discharged all it s liabilities by 30.3.2005 and no dues are pending for the purpose of debonding, the said M/s Asian Peroxides Ltd., (Plant-II) covered under Letter of Permission No. PER 471(1993)/EOB/409/93 dated 3.12.93 as amended from time-to-time is allowed to exit from 100% EOU Scheme to switch over to EPCG Scheme from the date of discharge of all its duty liabilities (i.e.) 30.3.2005 in terms of Para 6.18 (d) of Foreign Trade Policy read with para 5.4 of Hand Book of Procedures, 2004-09. The Green Card No. 160/VEPZ dated 5.2.97 valid upto 26.9.2005 issued to M/s Asian Peroxides Ltd., under 100% EOU Scheme is hereby cancelled. 8.16 The Appellants therefore, submit that the Authority competent to recognize the Unit as a 100% EOU or DTA Unit has stated that the LOP granted to the 100% EOU ceased to be in force w.e.f. 30.03.2005 from which date the EPCG License started to operate in so far as the Appellants are concerned. 8.17 The Appellants, therefore, submit that they cannot be considered to be 100% EOU after 30.03.2005 and consequently, all clearances of excisable goods made by them from that date have to be levied to normal Central Excise Duty under Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extended upto 18.11.2004 by the Development Commissioner. Jurisdictional Superintendent issued the demand directing payment of customs and excise duty after assessing, only on 25.03.2005, in pursuant thereto appellant have within a weeks time deposited the necessary and the requisite duty/taxes on 29.03.2005 and 30.03.2005 under intimation of Revenue, and also furnished the details of duty payment and execution of bond to the Assistant Commissioner, Nellore Division. In the meanwhile, Development Commissioner had issued no due certificate on 04.11.2004 for conversion of existing EOU Scheme into EPCG Scheme. Thereafter, after delay of several months, no dues is issued by the Jurisdictional Commissioner on 03.01.2006. All throughout the period from April 2005 to 3, January 2006, the appellant was pursuing the Excise Department to issue necessary no objection/no due certificate which was issued after much delay on 03.01.2006. Thereafter, the appellant was allowed exit finally from the 100% EOU scheme to switch over to EPCG scheme, from the date of discharge of its duty liability i.e. 30.03.2005 in terms of para 6.16(d) of FTP read with para 5.4 of HBP 2004-09. 11. We find that DGFT wh ..... X X X X Extracts X X X X X X X X Extracts X X X X
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