2015 (12) TMI 792 - AT - Customs

100% EOU - shortage of goods while shifting goods in the new unit Imposition of penalty - Non production of the documentary evidence for such shifting and the presence of the goods in the new unit - Held that - Revenue has not been able to rebut the findings given by the adjudicating authority as regards the malafide of the assessee. Their only case is that inasmuch the imported duty free goods were not available, it has to be held that there was malafide on their part, requiring higher imposition of penalty. - adjudicating authority has kept in view various factors and has come to a clear finding on absence of malafide on the part of the assessee. Admittedly the assessee has been able to establish the transfer of the item from one unit to their new premises to the extent of around 94%. The balance 6%, for which they were not able to show any documentary evidence was some minor items and cannot be held to be attributable to any malafide. As such we fully agree with the Commissioner that this act does not call for higher imposition of penalty. Commissioner has observed that the assessee has not been able to establish proof of having utilized the goods for the intended purpose and therefore the question of allowing depreciation on such bonded goods does not arise. - For the period from 2001 to 2005, the same were being used by the appellant and they would be in a position to prove it. If that be so, the duty required to be paid by the respondent should have been calculated on the depreciated value. Inasmuch as no such proof stands produced before us, we think it fit to remand the matter to Commissioner for entertaining the said plea of the assessee - Matter remanded back - Appeal disposed of.

Summary

Issues:
1. Whether the imposition of penalty on the respondent by the Commissioner was justified.
2. Whether duty should be calculated on the imported value or depreciated value of missing goods.
3. Whether the appeals filed by the Revenue and the respondent are to be allowed or rejected.

Analysis:
1. The respondent, a 100% EOU and STP unit, imported goods without duty payment. Subsequently, they shifted goods to another EOU premises, but some items went missing. The Customs Officers found discrepancies and demanded duty payment. The Commissioner, considering various factors, imposed a penalty of Rs. 1,00,000, concluding no deliberate violation of law. The Revenue appealed for enhanced penalty, alleging malafide on the respondent's part. However, the Tribunal upheld the Commissioner's decision, noting the absence of malafide and the respondent's ability to prove the transfer of goods to a new unit, rejecting the Revenue's appeal.

2. The respondent appealed on the grounds that duty should be calculated on the depreciated value of missing goods, not the imported value. The Commissioner stated the respondent failed to prove the utilization of goods for the intended purpose, thus disallowing depreciation. The respondent argued they used the goods from 2001 to 2005 and should pay duty on the depreciated value. The Tribunal remanded the matter to the Commissioner to consider the plea, as no conclusive proof was presented during the appeal hearing.

3. The Tribunal disposed of both appeals by rejecting the Revenue's appeal for enhanced penalty, citing the absence of malafide, and remanding the matter to the Commissioner regarding duty calculation on depreciated value. The Tribunal upheld the Commissioner's decision on penalty imposition, emphasizing the lack of deliberate violation by the respondent. The appeals were thus concluded in the manner described above.