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2014 (9) TMI 23 - AT - Customs100% EOU - import of 500 Kgs of Solenesol and 20 Kgs. of Octacosanol without payment of duty - Notification No.52/2003-Cus dated 31.3.2003 - Appellant did not utilized the material for 3 years nor did they clear it on payment of duty and nor they obtained extension of warehousing period in respect of these two inputs - Held that - No doubt, the application was made much after the period was over, yet, once the application was made, a formal decision should have been taken and communicated to the assessee. We also find that even the CBEC Circular had observed that such applications for extension of warehousing period could be made even after the warehousing period is over - passing of the order-in-original without waiting for a decision and without taking a decision on the application made by the appellant was unfair and cannot be justified. Accordingly, we set aside the impugned order and remand the matter to the first adjudicating authority with a direction to consider the issue after the application made by the appellant for extension of warehousing period is decided. - Decided in favour of assessee.
Issues:
Importation without payment of duty under Notification No.52/2003-Cus, failure to utilize imported material, failure to apply for extension of warehousing period, demand of duty, penalty, interest, fairness of adjudication process, freezing of appellant's account. Analysis: The appellant imported Solenesol and Octacosanol without duty payment under Notification No.52/2003-Cus as a 100% E.O.U. However, they did not utilize the material for 3 years, clear it on payment of duty, or obtain an extension of the warehousing period. This led to proceedings resulting in a demand of duty, penalty, and interest. The appellant's counsel argued that the material was not used due to a drastic price decrease, and the appellant's lack of legal knowledge caused the failure to apply for an extension in time. Despite a late application for extension in June 2012, a show-cause notice was issued in November 2012. The counsel highlighted the application for extension made by the appellant. The Tribunal noted that although the application for extension was late, once made, a formal decision should have been communicated to the appellant. Referring to a CBEC Circular, it was observed that applications for extension could be considered even after the warehousing period ends, based on various factors. The Tribunal found the adjudication unfair as the order was passed without waiting for a decision on the extension application. Consequently, the impugned order was set aside, and the matter was remanded for fresh adjudication after deciding on the extension application. The appellant's counsel requested the issuance of the order urgently due to the freezing of the appellant's account. The Tribunal considered the request reasonable and directed the authorities to defreeze the account. The appeal was decided by setting aside the impugned order and remanding the matter for fresh adjudication, ensuring the principles of natural justice are followed and a decision is made on the extension application. The appeal was decided accordingly, and the stay application was disposed of. The Registry was instructed to issue the order urgently. In conclusion, the Tribunal's decision focused on the procedural fairness in the adjudication process, emphasizing the importance of considering extension applications even after the warehousing period ends and ensuring a formal decision is communicated to the appellant. The judgment aimed to rectify the unfairness in the previous adjudication by remanding the matter for fresh consideration after deciding on the extension application, ultimately directing the defreezing of the appellant's account.
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