2007 (11) TMI 161 - AT - Central Excise

Uphold by the adj. authority that the appellant had violated the provisions of Ex. Not.1 /95 while bringing in the capital goods, without permission of the Development Commissioner - as if, the Development Commissioner, who is in charge of export oriented unit, has exonerated the EOU from the charges of violation of the foreign trade policy, the same has to be respected by all demand is not justified - appeal filed by the revenue is rejected

Summary

Issues:
1. Alleged violation of Exemption Notification No.1/95-C.E.
2. Non-payment of duties on MS drums and scrap.
3. Appeal against Order-in-Appeal setting aside demand and penalty.
4. Challenge to impugned order by the revenue.
5. Dispute over permission from Development Commissioner for capital goods import.
6. Validity of Commissioner (Appeals) decision.

Analysis:
1. The case involved allegations of violating Exemption Notification No.1/95-C.E. and failure to pay duties on MS drums and scrap. The Order-in-Appeal set aside the demand and penalty imposed on the appellant, leading to the revenue filing an appeal against this decision.

2. The revenue contended that the appellant did not have permission from the Development Commissioner for importing capital goods, which was a violation of the Notification. However, the Commissioner (Appeals) found that the capital goods were procured duty-free under CT-3, installed in the factory, and duties were paid under protest, leading to the dropping of the demand.

3. The Commissioner (Appeals) decision was based on the fact that the capital goods were used for manufacturing final products in a 100% EOU. The Development Commissioner had dropped the charges of unauthorized import upon finding that the goods were procured under proper certification, leading to the conclusion that there was no violation.

4. The Tribunal upheld the Commissioner (Appeals) decision, emphasizing the importance of encouraging export-oriented units. The Tribunal found that if the Development Commissioner had exonerated the EOU from any violation, it must be respected, and there was no merit in the revenue's appeal. The appeal was rejected, and the impugned order was upheld.

5. In conclusion, the Tribunal dismissed the appeal filed by the revenue and upheld the decision of the Commissioner (Appeals) regarding the alleged violations of the Exemption Notification and non-payment of duties, highlighting the significance of compliance with export policies and the authority of the Development Commissioner in such matters.