2010 (12) TMI 408 - AT - Customs

Demand of duty - 100% EOU - The shrimps cleared to DTA without permission of the Development Commissioner - The duty liability on the DTA clearances of the shrimps allegedly done by the appellant, it is seen that the relevant period in this appeal is 1994 to 1997. During the relevant period, provisions of Section 3(1) were not amended - 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. As Regards the shortage of the capital goods - Allowance of depreciation - Regards duty liability of the appellant on capital goods, the duty liability is not be disputed by the assessee, as they were admittedly found outside the EOU premises - The only question remains to be addressed is regarding the allowance of depreciation to the appellant - As per Final Order in the appellant s own case, the depreciation has to be worked out till the point of payment of duty - This order needs to be followed in by the Adjudicating Authority and hence, in order to re-quantify the amounts as per our direction in the appellant s own case,set aside the demands confirmed by the Adjudicating Authority on the capital goods and remand the matter back to him for considering it in accordance with the directions and law.

Summary

Issues Involved:
- Duty liability on goods cleared to DTA without permission
- Duty liability on missing capital goods
- Allowance of depreciation on capital goods
- Imposition of penalties

Analysis:

*1. Duty Liability on Goods Cleared to DTA Without Permission:*
The appellant imported capital goods for production and export as a 100% EOU. The Adjudicating Authority confirmed duty demand on goods cleared to DTA without permission. The appellant argued citing a Supreme Court judgment that duty liability arises under excise duty, not customs duty, for such clearances. The Tribunal upheld this argument, setting aside the demand as there was no excise duty on the goods during the relevant period.

*2. Duty Liability on Missing Capital Goods:*
Regarding missing capital goods, the Adjudicating Authority confirmed duty demands on Paddle Aerators and Diesel Generator Sets. The Tribunal agreed on the duty liability for the Diesel Generator Sets found outside the EOU premises. However, the Tribunal directed a re-quantification of duty considering depreciation until the point of payment of duty, as per a previous order in the appellant's case. The duty liability on Paddle Aerators was also set aside for re-quantification by the Adjudicating Authority.

*3. Allowance of Depreciation on Capital Goods:*
The appellant argued that the Adjudicating Authority did not grant depreciation until the payment of duty, as directed by the Tribunal in the previous order. The Tribunal reiterated the need for depreciation to be worked out till the point of payment of duty, directing the Adjudicating Authority to re-quantify the amounts accordingly.

*4. Imposition of Penalties:*
The Adjudicating Authority imposed penalties on the appellant and individuals for various violations. The Tribunal, while remanding the matter back for re-quantification of duty, also directed the Adjudicating Authority to reconsider the imposition of penalties after re-evaluating the issues. As the matter was remanded for re-examination, the department's appeal became infructuous, leading to the disposal of all appeals accordingly.