2015 (10) TMI 195 - AT - Customs

Demand of Custom and Excise duty Imposition of fines and penalty show cause notice was issued to Unit No. 1 of assesse proposing demand of customs duty under Section 28 of Customs Act 1962 alongwith interest and penalty on ground that Unit No 1 cleared duty free raw materials against fake advance licences Also show cause notice was also issued to unit II proposing demand of Excise Duty alongwith interest and to impose penalty on ground that being 100% EOU, unit had cleared goods as DTA sale without payment of CE duty Adjudicating Authority confirmed demand of duty and imposed redemption fine and penalty Held that -show cause notices were issued against both units proposing central excise duty on finished goods and appeals was filed against demand of duty on raw materials Tribunal in case of Vandevi Texturisers Pvt Ltd vs. CCE., Surat - 2007 (6) TMI 433 - CESTAT, AHMEDABAD held that demand of duty on raw material as well as finished products cannot be sustained Therefore matter should be remanded to Adjudicating Authority to decide afresh after considering allegations in all show cause notices against both units Impugned orders are set aside Matters remanded to Adjudicating Authority Decided partly in favour of Assesse.

Summary

Issues Involved:
- Central Excise duty demand on Unit I
- Customs duty demand on Unit I
- Central Excise duty demand on Unit II
- Remand of the matter for fresh adjudication

Central Excise duty demand on Unit I:
In this case, a show cause notice was issued to Unit I proposing a demand of central excise duty on Polyester Texturised Yarn (PTY) cleared as DTA sale without payment of duty. Another notice was issued proposing a demand of customs duty on imported raw materials. The Adjudicating Authority confirmed the demands, which were upheld by the Commissioner (Appeal). The appellant challenged this decision, arguing that the demands were not sustainable. The Tribunal, after hearing both sides, observed that demands on raw material and finished products cannot be sustained together. The matter was remanded to the Adjudicating Authority for fresh adjudication.

Customs duty demand on Unit I:
Unit I faced a demand of customs duty on imported raw materials cleared against fake advance licenses. The Adjudicating Authority confirmed the demand, which was upheld by the Commissioner (Appeal). The appellant challenged this decision, seeking a remand to adjudicate all show cause notices together. The Tribunal agreed with the appellant and remanded the matter for fresh adjudication.

Central Excise duty demand on Unit II:
Unit II was issued a show cause notice proposing a demand of central excise duty on Polyester Texturised Yarn cleared without payment of duty. Another notice proposed a demand equivalent to customs duty on raw materials. The Adjudicating Authority confirmed the demands, which were upheld by the Commissioner (Appeal). The appellant challenged this decision, seeking a remand to adjudicate all show cause notices together. The Tribunal found that demands on raw material and finished products cannot be sustained together and remanded the matter for fresh adjudication.

Remand of the matter for fresh adjudication:
After considering the submissions from both sides, the Tribunal decided to remand the matter to the Adjudicating Authority for fresh adjudication. The Tribunal noted that demands on raw material and finished products cannot be sustained together and directed the Adjudicating Authority to decide all show cause notices against both units afresh. The impugned orders were set aside, and the appeals were allowed by way of remand. Miscellaneous applications for extension of stay order were dismissed as infructuous.