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2013 (12) TMI 1243 - AT - CustomsDuty demand - Benefit of concessional rate of duty under Sr. No. 425 of Notification No. 21/2002-Cus. dated 1-3-2002 - Applicants had not used the imported goods for specified purposes - Held that - goods imported by availing the benefit of Notification No. 21/2002-Cus. As per the condition 5 of the Notification, the procedure set out in the Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996 is to be followed. As per Rule 8 of the above mentioned Rules, the jurisdictional Assistant Commissioner of Central Excise or Dy. Commissioner of Central Excise shall ensure that the goods imported are used by the manufacturer for the intended purpose and in case of violation, the jurisdictional Assistant Commissioner of Central Excise or Dy. Commissioner of Central Excise is empowered to issue notice to recover the Customs duty under Section 28 of the Customs Act. In the present case, the show-cause notice is issued by the Commissioner of Customs for demanding duty for violation of the conditions of Notification. As the Commissioner of Customs is not a competent authority to issue show cause notice, we find that the applicants have made out a strong prima facie case in their favour for complete waiver of dues adjudged - Stay granted.
Issues:
1. Jurisdictional authority to issue show-cause notice for violation of customs duty conditions under Notification No. 21/2002-Cus. 2. Validity of demand for duty based on show-cause notice issued by the Commissioner of Customs instead of the jurisdictional Assistant Commissioner of Central Excise or Dy. Commissioner of Central Excise. Analysis: Issue 1: The applicants filed for waiver of pre-deposit of duty amounting to Rs. 50,46,728/- along with interests and penalties, after a show-cause notice was issued by the Commissioner of Customs demanding duty for not using imported goods for specified purposes under Notification No. 21/2002-Cus. The contention raised was that only the jurisdictional Assistant Commissioner of Central Excise or Dy. Commissioner of Central Excise is authorized to issue such notices, as per Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996 and Condition No. 5 of the Notification. The Revenue argued that the Bond executed at the time of import allowed the Assistant Commissioner of Central Excise/Customs to recover duty in case of violation of Notification conditions. Issue 2: The Tribunal found that under Rule 8 of the Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996, the jurisdictional Assistant Commissioner of Central Excise or Dy. Commissioner of Central Excise is mandated to ensure compliance with intended use of imported goods and issue notices for duty recovery in case of violations. However, in this case, the show-cause notice was issued by the Commissioner of Customs, not the competent authority as required by the Rules. Consequently, the Tribunal held that the applicants had a strong prima facie case for complete waiver of the dues adjudged. Therefore, the Tribunal granted the waiver of pre-deposit of the entire duty amount, interests, and penalties, and stayed the recovery during the pendency of the appeals. The order was pronounced in open court.
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