2023 (11) TMI 227 - AT - Customs

Conversion from EOU to EPCG - Quantification of duty - department has not provided the details of computation of the demand of duty, therefore, the appellant is unable to make their defense submission - HELD THAT - It is found that the individual duty demand from serial No. 1 to 16 is not supported by the documents it is necessary to arrive at the conclusion that whether the quantification of demand is correct and whether such duty is payable by the appellant. The matter needs to be reconsidered by the adjudicating authority by providing the necessary documents whereby the correct quantification of duty, if any can be ascertained. Accordingly, the impugned order set aside and the appeal allowed by way of remand to the adjudicating authority for passing a fresh order.

Issues involved: Conversion from 100% EOU to EPCG, Demand of duty quantification, Challenge to demand letter, Show cause notice issuance.

Conversion from 100% EOU to EPCG: The appellant, a 100% EOU engaged in manufacturing sheet glass, requested conversion to EPCG after trial production. Various goods were cleared to DTA with permission. The department directed payment of duty, issued a license under EPCG Scheme, and demanded a sum of Rs. 6,76,07,490/-. The appellant challenged this demand in the High Court, which granted interim relief. The High Court allowed the challenge, stating demand letters without show cause notice and adjudication were improper. The Supreme Court permitted the department to issue a show cause notice, which was done on 04.05.2009.

Demand of duty quantification: The appellant contended that the department failed to provide details of how the duty demand was calculated, hindering their defense submission. Despite repeated requests, no specifics were given in the show cause notice or thereafter. The adjudicating authority confirmed the demand without providing the necessary details for quantification. The appellant's written submission post-hearing highlighted this lack of information.

Challenge to demand letter: The appellant argued that without the basis of quantification of the duty demand, they were unable to defend their case effectively. The department's reliance on a broad description in the impugned order was deemed insufficient by the appellant. The limited issue raised was the absence of detailed computation of the duty demand, rendering the impugned order unsustainable. The appellant emphasized the need for specifics to adequately address the demand.

Show cause notice issuance: The show cause notice dated 04.05.2009 lacked reliance on any document for quantifying the demand. The details provided in the notice were deemed insufficient to ascertain the correctness and applicability of the duty payable by the appellant. The Tribunal found that the individual duty demands were not supported by the necessary documents to validate the quantification. Consequently, the matter was remanded to the adjudicating authority for a fresh order with proper documentation for quantification.

*(Pronounced in the open court on 03.11.2023)*

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