2002 (9) TMI 749 - AT - Central Excise

Summary

Issues:
1. Duty liability on capital goods imported by a 100% Export-Oriented Unit (EOU) under Notification No. 13/81-Cus.
2. Permission granted for DTA clearance and premature de-bonding of imported capital goods.
3. Applicability of Para 5(a) of the exemption notification.
4. Financial hardship plea and waiver of duty, penalty, and interest.

Analysis:

1. The appellants, a 100% EOU, imported capital goods under Notification No. 13/81-Cus. but failed to fulfill their export obligations. A Show Cause Notice was issued for recovery of duty amounting to Rs. 30,70,578/- and imposition of a penalty under the Customs Act, 1962. Lower authorities confirmed the duty and imposed a penalty, which was upheld by the Commissioner (Appeals).

2. The appellants sought permission for DTA clearance and premature de-bonding of imported capital goods due to inability to meet export obligations. They argued that the duty demanded was not in accordance with the permission granted by the authorities and cited relevant letters supporting their actions.

3. The appellants contended that their case fell under Para 5(a) of the exemption notification, which allowed clearance of capital goods on payment of duty based on the depreciated value. They claimed that the duty amount payable should be significantly lower than the amount demanded, but they failed to provide specific details during the hearing.

4. Despite acknowledging their duty liability, the appellants pleaded financial hardship and requested a waiver of the duty, penalty, and interest. However, they did not submit updated financial statements to support their claim. The Tribunal directed them to make a pre-deposit of Rs. 10 lakhs within eight weeks, failing which the appeal would be dismissed. Compliance was scheduled for a later date.

This detailed analysis covers the duty liability, permission for clearance and de-bonding, interpretation of the exemption notification, and the appellants' plea for financial relief in the context of the legal judgment delivered by the Appellate Tribunal CEGAT, Mumbai.