TMI Blog2005 (7) TMI 245X X X X Extracts X X X X X X X X Extracts X X X X ..... section 65). They availed the benefit of notification 1/95-C.E. as amended 13/81-Cus. in respect of Indian foreign raw materials, procured duty free, required for manufacture of the final products. (b) Some time in 1996, to cater the buyers in the domestic market as well as for carrying out repairs in respect of the drilling pipes received, they started the Domestic Tariff Unit (herein after referred to as DSU for short) adjacent to the EOU with its own set of Capital Goods manufacturing using locally procured duty paid material. 1.3 Pursuant to specific intelligence, that they were evading Customs Excise Duties enquiries were made and a notice dated 26-7-2001 was issued. The notice issued, called upon to show cause as to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rovisions of the Customs Notification No. 13/81-Cus., dated 9-2-1981 as amended, in force during the material time, as under the proviso of sub-section (1) of Section 28 of the Customs Act, 1962 read with Section 72 of the Customs Act, 1962. (v) The C.E. Duty of Rs. 6,01,972/- as detailed in Annexure E to SCN during the period from 1995-1996, foregone on the machinery allowed to be procured indigenously duty free should not be demanded and recorded from them for contravention of provision of C. Ex. Notification No. 1/95-C.E., dated 4-1-1995 as under the proviso to sub-section (1) of Section 11A of the C. Ex. Act, 1944. (vi) The C. Ex duty amounts to Rs. 5,59,43,039/- as detailed in Annexure F to SCN on the goods cleared in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 49,70,155/- as detailed in Annexure C Rs. 3,02,51,893/- as detailed in Annexure D along with penalty along with interest under section 11AB. A penalty of Rs. 10 lakhs was imposed on the Jt. Managing Director under Rule 209A. Hence these appeals. 2.1 After hearing both sides and considering the material it is found : (a) Annexure D to show cause notice is a demand of Rs. 3,02,51,893/- on the machinery allowed to be imported duly free in the EOU which was alleged to have been used in contravention of the provision of the said notification. There is no provision in the notification, shown to us, under which the capital goods imported in an EOU providing that they would be used exclusively for manufacture of the EOU production Reli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds the duty demand of Rs. 5,59,43,039/- as Annexure F demanded on goods cleared under the provisions of para 9.10(b) of the Exim Policy, as supplies from ah EOU during the period 1998-1999 till 31-10-2000, the same cannot be upheld following the settled position by the Tribunal decision in case of Maruti Cottex Ltd. Ors. [2005 (183) E.L.T. 393 (Tribunal) = 2005 (68) RLT 534]. These clearances are duty free duty cannot be demanded from the manufacturer i.e. EOU in this case. Reliance placed by the Ld. SDR on para 9.26 of Exim Policy stipulating the liability to pay Excise Duty, Sales Tax other taxes leviable would be a liability on the Purchaser not the seller. This para does not help the case of Revenue to demand duty on the seller ..... X X X X Extracts X X X X X X X X Extracts X X X X
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