2001 (9) TMI 160 - AT - Central Excise

Summary

Issues:
1. Confirmation of customs duty, penalty, and confiscation of goods by the Commissioner of Central Excise.
2. Fulfillment of export obligations by the 100% EOU.
3. Legal validity of the impugned order in light of Circular No. 21/95-Cus.

Analysis:

1. The appellants, a 100% EOU engaged in canned mushroom manufacturing, imported capital goods and raw materials under specific notifications. They exported their products from 1993-94 to 1996-97 but closed production in 1996. The Commissioner issued a show cause notice proposing duty confirmation, penalty, and confiscation. The appellants contended they fulfilled export obligations, applied for re-bonding, and challenged the notice.

2. The appellants argued that demanding customs duty and confiscation was premature as their de-bonding application was pending, and the Development Commissioner had not concluded on export obligation breaches. Referring to Circular No. 21/95-Cus, the appellants stressed that duty demand could only follow the Commissioner's recommendation post a definite conclusion by the Development Commissioner.

3. The Tribunal upheld the appellants' contentions, citing the Circular's requirement for the Development Commissioner's input before confirming duty demand on a 100% EOU. As the Development Commissioner had not acted against the appellants for export obligation non-fulfillment, the duty demand, penalty imposition, and confiscation orders were deemed premature and set aside. The Tribunal referenced a similar case to support its decision and directed competent authorities to await the Development Commissioner's recommendations before pursuing duty recovery against the appellants. The appeal was allowed with consequential relief as permissible by law.