2007 (1) TMI 604 - HC - Customs

Summary

Issues:
1. Duty payable minus encashed bank guarantee.
2. Grant of Modvat credit to the assessee.
3. Confiscation of machinery embedded in the earth.

Analysis:
1. The assessee imported machinery under the EPCG Scheme but failed to fulfill the export obligation, leading to penalties under the Customs Act. The Tribunal accepted the contention that duty payable should be reduced by the amount encashed from the bank guarantee. This decision was upheld without further discussion.

2. The assessee's second contention was regarding the grant of Modvat credit. The Tribunal ruled that if entitled, the benefit could be extended post payment of the duty. This conclusion was deemed correct, with no arising legal question.

3. The third contention raised was about the confiscation of machinery embedded in the earth. Reference was made to Section 111(o) of the Customs Act and a Circular by the Central Board of Excise and Customs. The Circular stated that machinery attached to the earth could be considered goods if dismantled without substantial damage. As there was no evidence showing the machinery couldn't be dismantled without damage, the Tribunal's decision was upheld, concluding that no substantial legal question arose for consideration.