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Issues involved: Duty on imported capital goods, duty on raw material shortages, bond execution responsibility.
The judgment by the Appellate Tribunal CESTAT, AHMEDABAD involved a case where the appellants, a 100% EOU engaged in manufacturing readymade garments, faced issues regarding duty on imported capital goods and raw material shortages. The appellants imported duty-free capital goods and raw materials for production, but during stock verification, it was discovered that the capital goods were not available in their factory. The appellants claimed that the machines were temporarily shifted to a job worker in the Zone for fulfilling export obligations, but the job worker did not return the goods. Regarding raw material shortages, the appellants argued that the amount was within permissible limits under the Import-Export Policy. The Commissioner, in the impugned order, held that the appellants, having executed a bond, were responsible for properly accounting for the capital goods. The Commissioner stated that the appellants should have taken back the capital goods after completing the job work with the job worker. Due to the failure to do so, the Commissioner ruled that the appellants were liable to pay the duty on the capital goods. After considering the arguments from both sides and referencing a previous Tribunal decision, the Appellate Tribunal set aside the impugned order. Citing the case of M/s. ABN Granites Ltd. v. CCE, Cochin, the Tribunal directed the matter to be remanded to the Adjudicating Authority for proper adjudication following the procedure and passing an order in accordance with the law. The Tribunal clarified that no opinion was given on the merits of the case, allowing the Adjudicating Authority to handle the matter as per legal requirements. The appeal was allowed by way of remand.
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