2008 (4) TMI 639 - AT - Customs

100% EOU - Demand of customs duty - Clandestine removal from 100% EOU - shortage of goods - texturised yarn - penalty

Summary

Issues:
1. Central Excise duty confirmation and penalty reduction.
2. Customs duty confirmation and penalty imposition.

Central Excise Duty Confirmation and Penalty Reduction:
The case involved four appeals, two under the Excise Act and two under the Customs Act, arising from the same impugned order. The appellant, a 100% EOU, faced proceedings due to a shortage of finished products found during a factory visit. The show cause notice demanded Central Excise duty and Customs duty on duty-free imported raw material used in manufacturing the short found goods. The impugned order confirmed the demands and imposed a 100% penalty. The appellant did not contest the Central Excise duty but requested a penalty reduction in line with a Delhi High Court case. Consequently, the Central Excise duty was confirmed, and the penalty was reduced to 25% of the amount.

Customs Duty Confirmation and Penalty Imposition:
Regarding the confirmation of Customs duty, it was noted that since the entire Central Excise duty had been paid, the demand for Customs duty and penalty under the Customs Act was not sustainable. The Tribunal referred to several decisions to support this position. Following the legal precedent set in those cases, the confirmed Customs duty and penalty were set aside. Additionally, the penalties imposed on an individual were entirely set aside. Ultimately, all the appeals were disposed of based on the above decisions.