TMI Blog2003 (6) TMI 89X X X X Extracts X X X X X X X X Extracts X X X X ..... f the case are that the appellants are a joint Sector Project with the Tamil Nadu Industrial Development Corporation holding 26% equity in collaboration with Corning glass USA and STT Badalex PLC UK and they had obtained two EPCG licences. Based on specific information the DRI officers investigated the import of capital goods worth Rs. 8.88 crores under EPCG licence No. P/CG/2199184, dated 27-1-92 and P.CG/2100383, dated 31-7-92 by the appellants herein and it was revealed that the importer had not fulfilled the export obligation within the prescribed period as stipulated in the licence. The following capital goods were imported against licence No. EPCG/P/CG/2129184, dated 27-1-92 and were supplied by M/s. Corning Incoporated USA : (1) Forehearth Super Structure Refractories (2) Forehearth firing system with control (3) Forehearth Thermocouple Hardware (4) Wind Cooling system with control (5) Stirrers (6) Stirrers doives etc. These goods were cleared vide Bill of Entry Nos. (a) 3506/20-4-92 (b) 4003, dated 11-5-92. The total value of the capital goods imported against the said licence works out to Rs. 8,88,90,507/-. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se notice is not given within six months, goods are required to be released unless the period of show cause notice is extended by the Commissioner. It was also held therein that 'given' means service of the notice and not mere issuing of it. He has also relied upon the judgment of this Bench in the case of FAL Industries Ltd. v. CC, Chennai, reported in 2003 (106) ECR 291 wherein it has been held that in the absence of any statutory provisions, interest cannot be demanded. He therefore submitted that demand of interest is not legal and proper and is required to be set aside. He has also referred to Notification No. 169/90, dated 3-5-90 and 160/92, dated 20-4-92 which have been issued granting exemption from duty in respect of capital goods imported by specified importer under the Export Import Policy and submitted that none of these notifications stipulate anything regarding payment of interest. He has also referred to para 10(i), (ii) and (iii) of the show cause notice wherein the show cause notice referred to Notification No. 169/90. He has also referred to the proceedings before the Board for Industrial and Financial Reconstruction under which the company has been declared as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... refully considered the rival submissions and gone through the case records. In this case the appellant-company was started as a Joint Sector Project with Tamil Nadu Industrial Development Corporation. The appellants were granted two Export Promotion Capital Goods (EPCG) licences on furnishing indemnity-cum-surety bond with DGFT. The Project was set up for the purpose of manufacture of fluorescent tubes lightings and general lighting bulbs. In terms of the licences, capital goods were imported availing the exemption under Customs Notification No. 169/90, dated 3-5-90 and 160/92 as applicable to EPCG Scheme which cast an obligation on the appellants to export goods and accordingly they had executed bonds with the Bank Guarantees binding themselves to pay the differential duty on demand in case of non-fulfilment of export obligations. The appellants utterly failed to fulfil the export obligations cast on them within a period of five years from the date of first import and in fact they could only export 1.1% of the export obligation cast on them and they have expressed their inability to fulfil the export obligations. The reasons put forward by them was lack of working capital as the B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1999 (109) E.L.T. 21 (SC) has held that if the show cause notice is not issued within six months from the date of seizure, the only consequences would be that the person from whom the goods were seized would become entitled to their return, but the adjudicating authority would not be denuded of the power to initiate proceedings even thereafter. What flows from the judgment is that when a person is entitled to get the goods back, the question of its confiscation does not arise. In view of the fact that in the instant case, admittedly, the show cause notice has not been served on the appellants within the six months, the confiscation of the goods is not legal and proper and so also the demand of redemption fine. We, therefore, set aside the order of confiscation of the goods and demand of redemption fine. (ii) Whether duty of Rs. 3,05,11,954 with interest @ 24% from the date of import is demandable or not and whether imposition of penalty is warranted or not. We observe that there is no dispute that the appellants have failed to fulfil the export obligations cast on them in terms of the licences granted to them read with Notification No. 169/90. In view of this, duty is demandab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oceedings under the Customs Act against the appellants. The appellants have taken a plea that the Commissioner has totally ignored that the provisions of Section 22 of the Sick Industrial Companies (Special Provision) Act, 1985 (SICA) override the provisions relating to recovery contained in the other Acts. In support of their plea they have pressed into service the judgment of the Hon'ble Apex Court in the case of Tata Davy Ltd. v. State of Orissa, reported in (1997) 6 SCC 669 wherein the Hon'ble Apex Court had occasion to interpret the words "any other law" occurring in Section 22(1) of the SICA, 1985 and the Apex Court has held that the term "any other law" covers even laws made under the State List and hence without the Board's consent arrears of sales tax under a State Act could not be recovered from the sick company during the continuance of the implementation of the scheme. They have, therefore, pleaded that order of confiscation of the capital goods of the sick unit and any coercive recovery action has to be held in abeyance by the Commissioner without the consent of the BIFR. We have gone through the judgment of the Hon'ble Apex Court and we note that in the cited case w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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