2008 (11) TMI 546 - AT - Central Excise

Summary

Issues:
1. Differential duty on capital goods and unused raw materials
2. Confiscation and imposition of fine and penalty
3. Payment of interest in view of specific notifications

Analysis:

Issue 1:
The case involved the appellant, a 100% EOU manufacturing hand tools in a bonded warehouse, who was directed to deposit customs duty on capital goods and central excise duty on indigenous capital goods and unused imported raw materials. The Commissioner of Central Excise modified the duty demand, directing the appellant to pay a specific amount on imported capital goods and unused raw materials, along with interest. The Tribunal noted that the appellant did not contest the demand of differential duty arising from the final assessment. However, the Tribunal found that the rejection of remission of duty did not warrant confiscation of goods or imposition of penalties. Therefore, the Tribunal upheld the demand of duty but set aside the confiscation, redemption fine, and penalty.

Issue 2:
Regarding the confiscation and imposition of fine and penalty, the Tribunal observed that the appellant had applied for remission of duty on the unused raw materials under Section 23 of the Customs Act, 1962. The Commissioner had noted that the goods were already warehoused, making Section 23 inapplicable. As a result, the Tribunal concluded that there was no justification for the confiscation of goods and the imposition of penalties. The demand of duty was linked to the final assessment and the denial of remission, leading the Tribunal to rule against the confiscation, redemption fine, and penalty.

Issue 3:
The appellant contested the payment of interest, citing specific notifications. The Tribunal directed the adjudicating authority to review the appellant's claim regarding interest payment in light of Notification No. 67/95-Cus. (N.T.) dated 1-11-95 and Notification No. 18/03-Cus. dated 1-3-2003. The Tribunal disposed of the appeal with the decision to uphold the demand of duty, set aside the confiscation and penalties, and instructed a review of the interest payment claim based on the mentioned notifications.

In conclusion, the Tribunal's judgment addressed the differential duty on capital goods and unused raw materials, the confiscation and penalties imposed, and the issue of interest payment in accordance with specific notifications, providing a detailed analysis and ruling on each aspect of the case.