2010 (12) TMI 134 - AT - Customs

Shortage of capital goods and alleged clearances made to DTA without Development Commissioners permission Department demanded the duty, interest and penalty - Supreme Court in the case of Commissioner of Central Excise, Visakhapatnam-II Vs. M/s. NCC Blue Water Products Ltd. - (2010 -TMI - 77633 - Supreme Court of India) would cover the issue in assessee favour - even if goods are removed without permission of Development Commissioner, the duty liability arises on the assessee is of the excise duty and not the customs duty. During the relevant period, there was no excise duty on the shrimps which were cleared in the local market, hence, there cannot be any duty liability. The only question remains to be addressed is regarding the allowance of depreciation to the appellant - the depreciation has to be worked out till the point of payment of duty. Duty liability on Paddle Aerators is also set aside and the matter is remitted back to the Adjudicating Authority to reconsider the issue afresh after following principles of natural justice - The appeals are disposed of

Summary

Issues:
- Duty liability on shrimps cleared to DTA without permission
- Duty liability on 385 Nos. of Paddle Aerators and 4 Nos. of Diesel Generator Sets
- Allowance of depreciation on Diesel Generator Sets
- Availability of Paddle Aerators in the EOU premises
- Imposition of penalties

Duty liability on shrimps cleared to DTA without permission:
The Tribunal considered the duty liability on shrimps cleared to DTA without permission during the period 1994-1997. Referring to a previous judgment upheld by the Supreme Court, it was established that even if goods are removed without permission, the duty liability falls under excise duty, not customs duty. As there was no excise duty on the cleared shrimps during that period, the Tribunal set aside the demands confirmed by the Adjudicating Authority.

Duty liability on 385 Nos. of Paddle Aerators and 4 Nos. of Diesel Generator Sets:
Regarding the duty liability on the Paddle Aerators and Diesel Generator Sets, the Tribunal acknowledged that the duty on the Diesel Generator Sets, found outside the EOU premises, was not disputed by the appellant. However, the Tribunal emphasized the need to rework depreciation on the Diesel Generator Sets until the point of payment of duty, as per a previous order. The duty demand on the Paddle Aerators was also set aside for re-quantification, as the appellant claimed the aerators were available on the premises, and the Adjudicating Authority did not provide clear findings on this matter.

Allowance of depreciation on Diesel Generator Sets:
The Tribunal directed the Adjudicating Authority to rework the depreciation on the Diesel Generator Sets until the point of payment of duty, in accordance with previous directions and the law. This was deemed necessary for a fair assessment of the duty liability on the sets.

Availability of Paddle Aerators in the EOU premises:
The Tribunal highlighted that the Adjudicating Authority did not record clear findings on the appellant's claim regarding the availability of Paddle Aerators on the EOU premises. Therefore, the duty liability on the aerators was set aside for re-quantification, and the matter was remitted back to the Adjudicating Authority to reconsider after ensuring principles of natural justice.

Imposition of penalties:
The Tribunal also instructed the Adjudicating Authority to reconsider the issue of imposing penalties in light of the re-quantification of duty liabilities and the findings on the availability of Paddle Aerators. The appeals were disposed of accordingly, with one departmental claim becoming infructuous due to the remand of the matter for further examination by the Adjudicating Authority.