2004 (10) TMI 120 - AT - Central Excise

Summary

Issues:
1. Appeal against adjudication order passed by Commissioner of Central Excise regarding demand confirmation for imported machines by a 100% EOU under Notification No. 53/97-Cus.

Analysis:
The appellant filed appeals against the adjudication order confirming the demand for three imported machines due to failure to install them within one year, as required by Notification No. 53/97-Cus. The appellant argued that the notification allows for an extension of up to five years for installation, and due to the machines being old and needing repairs, they were unable to meet the one-year deadline. The machines were eventually installed after 2 1/2 years, and the appellant applied for an extension, which was denied by the Commissioner of Central Excise. The Revenue contended that strict compliance with the notification conditions was necessary, citing a Supreme Court decision. The Tribunal noted that the notification indeed allowed for installation within one year or an extended period of up to five years by the Assistant Commissioner/Deputy Commissioner or the Dy. Commissioner. Since the machines were installed within the extended period and the reasons for the delay were justified, the demand for duty and confiscation was set aside. However, a penalty of Rs. 25,000 was imposed on the importer, with personal penalties on the Managing Director and Vice-President being set aside.

This judgment clarifies the interpretation of Notification No. 53/97-Cus regarding the installation timeline for imported machines by a 100% EOU. It emphasizes the importance of adhering to notification conditions while also considering justifiable reasons for any delay in compliance. The Tribunal's decision to set aside the demand for duty and confiscation, while imposing a reduced penalty, demonstrates a balanced approach in applying the legal provisions.