2014 (10) TMI 827 - AT - Central Excise

Exemption Notification No. 52/2003-Cus. - Confiscation of goods - Imposition of penalty - Held that - Import of duty free machines and clearance thereof in DTA after use, Notification No. 22/2003-C.E. does not apply. Therefore all the findings of the ld. Commissioner on the issue of applicability of Notification No. 22/2003-C.E. is not relevant. In view of our above observations, this is a fit case for remand, accordingly the matter in respect of all the present appellants is remanded to the Adjudicating Authority for passing a fresh order and while passing such order, the Authority is directed to first ascertain the date of clearance of the machines from EOU to DTA so that depreciated value can be correctly determined. The Adjudicating Authority in de novo proceeding also required to ensure the correctness of the appellant s claim regarding time and amount of payment of duty paid on said machines. - Matter remanded back - Decided in favour of assessee.

Summary

Issues:
- Denial of benefit of Notifications
- Duty demand under Customs Act
- Interest demand under Customs Act
- Penalty imposition under Customs Act
- Confiscation of machines
- Imposition of penalties on related parties

Denial of Benefit of Notifications:
The case involved the denial of benefits of Notification No. 52/2003-Cus. and No. 22/2003-C.E. to the appellant for importing duty-free machineries. The appellant, a 100% EOU, imported Computer Embroidery Machine and Caterpillar Gas Machine under the said notifications for manufacturing fabrics. However, a search revealed that the machines were not available in the factory premises, leading to a show cause notice proposing denial of benefits, duty demand, penalty, and interest. The appellant claimed to have cleared the machines to DTA units after payment of applicable duty, citing Notification No. 22/2003-C.E. The Tribunal observed that if machines were installed and used by the EOU before clearance to DTA units, the conditions of Notification No. 52/2003-Cus. were met. The Tribunal found no requirement for permission for clearance under the notifications, remanding the matter for determining the correct depreciated value at the time of clearance.

Duty Demand and Penalty Imposition:
The impugned order demanded duty under Section 28 of the Customs Act, 1962 read with Section 3 of the Central Excise Act, 1944, and imposed penalties on the appellant and related parties for alleged violations. The appellant contended that duty should be levied on the depreciated value at the time of clearance to DTA units, as per Notification No. 52/2003-Cus. The Tribunal found the denial of Notification No. 22/2003-C.E. not applicable in this case of importing duty-free machines and clearing them to DTA after use. Therefore, the matter was remanded for a fresh order to determine the correct depreciated value and payment of duty. The Tribunal emphasized giving all appellants a fair hearing in the de novo proceedings.

Confiscation of Machines and Interest Demand:
The impugned order also confiscated machines valued at a specific amount and demanded interest under Section 28AB of the Customs Act, 1962. The Tribunal's decision to remand the case for a fresh order covered all aspects, including the confiscation of machines and interest demand. It directed the Adjudicating Authority to verify the date of clearance of machines from EOU to DTA to determine the depreciated value accurately.

Conclusion:
The Tribunal disposed of all appeals by remanding the case for a fresh order, including stay applications. The Adjudicating Authority was directed to conduct de novo adjudication proceedings within two months, ensuring correctness in determining the depreciated value and payment of duty on the machines. All appellants were to be given sufficient opportunities for hearing and presenting submissions during the proceedings.