2004 (1) TMI 201 - AT - Customs

Export-Oriented Undertaking (EOU) 100% - Demand of customs duty on goods - Show cause notice - Corrigendum - Limitation - applicability of exemptions under the EXIM Policy - Penalty - HELD THAT - We are of the considered view that the show cause notice dated 1-7-98 as amended by the so-called corrigendum dated 9-2-2001 should be treated as an original show cause notice issued on 9-2-2001 for demanding customs duty and imposing penalty under the provisions of the Customs Act. We also note that the larger period of limitation was not invoked for this demand. Obviously, the demand of customs duty raised on 9-2-2001 in respect of the raw material imported by the appellants during 1997-98 is barred by limitation u/s 28 of the Customs Act. A jurisdictional objection was also raised by the Counsel, but that was with reference to the show cause notice issued on 1-7-98 by the Superintendent demanding Central Excise duty. As the said notice did not survive beyond 8-2-2001, we think it is futile to examine the jurisdictional issue. Yet another ground raised against the demand of customs duty was that the duty-free assessment made by the proper officer on the ex-bond Bills of Entry u/s 47 of the Customs Act had become final and binding on the Revenue for want of review u/s 129D of the Act. As for the penalty, we find that the Commissioner has imposed a penalty u/s 112(a) of the Customs Act whereas what was proposed in the show cause notice dated 9-2-2001 was a penalty u/s 114A of the Act. Any penalty beyond the scope of the show cause notice cannot be sustained. In the result, we set aside the impugned order and allow this appeal with consequential relief.

Summary

Issues involved:
The issues involved in this case include the demand of customs duty on goods cleared by a 100% Export-Oriented Undertaking (EOU) to a Domestic Tariff Area (DTA) unit without payment of duty, the jurisdictional aspects of the show cause notice, the applicability of exemptions under the EXIM Policy, and the imposition of penalty under the Customs Act.

Summary:

1. Demand of Customs Duty and Jurisdictional Issues:
The appellants, an EOU, imported goods under the EOU Scheme and cleared them to a DTA unit without payment of duty. The demand of duty was initially raised under the Central Excise Act but later transformed into a demand under the Customs Act through a corrigendum. The Tribunal held that this transformation was not valid as the nature of duty under each Act is distinct. The demand of customs duty was found to be time-barred under Section 28 of the Customs Act.

2. Applicability of Exemptions under EXIM Policy:
The Department contended that the goods were cleared to the DTA unit in breach of the EXIM Policy. The Tribunal noted that the Advance Release Orders were issued without legal authority, and the clearance to the DTA unit was not recognized as importation. The conditions of an exemption notification were found not to be fulfilled, rendering the exemption unavailable.

3. Penalty Imposition:
The Commissioner imposed a penalty under Section 112(a) of the Customs Act, differing from the penalty proposed in the show cause notice. The Tribunal held that any penalty beyond the scope of the notice cannot be sustained.

Conclusion:
The Tribunal set aside the order of the Commissioner, allowing the appeal with consequential relief.

This summary provides a detailed overview of the issues involved in the legal judgment, including the demand of customs duty, jurisdictional aspects, applicability of exemptions under the EXIM Policy, and the imposition of penalties under the Customs Act.