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2005 (5) TMI 172 - AT - CustomsValuation of Imported Goods - EXIM - Debonding - Export obligation - Whether the appellants are entitled to depreciation on the goods imported and not fully used, for the purpose of calculating the duty and as to whether RF and penalty is imposable - HELD THAT - On our consideration, we find that this was the question, which was before the Bench in the case of CCE v. Solitaire Machine Tools P. Ltd 2002 (11) TMI 165 - CEGAT, MUMBAI , wherein the Tribunal, on due consideration of this very point, held that the depreciation has to be given up to the date of payment of duty and not up to the date of de-bonding. It is noted that in circumstances, which are beyond the control of the appellants, the penalty and RF is not imposable. The appellants have not made any deliberate attempt to avail the benefit of the Notifications wrongly and their bona fides have not been doubted. Hence, the confiscation, fine and penalty has to be set aside. Applying the ratio of the Tribunal's judgment cited by the learned Counsel, RF and penalty are set aside and the matter is remanded to the original authority to quantify the duty after granting them depreciation up to the point of payment of duty as held in the judgment cited by the learned Counsel. The appeal is allowed in the above terms.
Issues:
- Confiscation and redemption of imported and indigenous goods - Alleged violation of export obligation under Notification No. 196/94-Cus. and 10/95-C.E. - Claim for depreciation on imported goods - Imposition of penalty and redemption fine Confiscation and Redemption of Goods: The appeal involved the confiscation and redemption of imported and indigenous goods valued at Rs. 42,11,140/- and Rs. 2,92,73,976/- respectively. The appellants, a 100% EOU, were accused of importing duty-free goods and procuring indigenous goods without paying C.E. Duty, leading to the initiation of proceedings against them due to non-fulfillment of export obligations for the years 1997-1998 to 2000-2001. The appellants cited reasons such as unit closure, Supreme Court ban on Aqua Culture, declaration as a sick unit, and lack of working capital for their failure to meet export obligations. Claim for Depreciation on Imported Goods: The appellants sought relief for depreciation on imported goods until the date of duty payment, referring to various judgments like Taurus Novelties Ltd. v. CC, Bangalore and others. The learned Counsel argued that in circumstances where a unit cannot function due to unavoidable reasons, redemption fine and penalty should not be imposed, as supported by the cited cases. Imposition of Penalty and Redemption Fine: The JCDR contended that while depreciation could be granted, it should only be calculated until the date of de-bonding as per the judgment in Kesoram Rayon v. Collector of Customs, Calcutta. She argued that penalty is leviable for default in fulfilling Advance Licence conditions, citing relevant judgments. The learned Counsel distinguished these judgments, emphasizing that penalties should not be imposed in cases of extenuating circumstances leading to violations. Judgment Analysis: Upon careful consideration, the Tribunal focused on whether the appellants were entitled to depreciation on imported goods and if redemption fine and penalty were justifiable. It was noted that the appellants' inability to meet export obligations due to uncontrollable reasons warranted leniency. The Tribunal found that penalties were not warranted as the appellants did not intentionally misuse the Notifications to evade duty. Consequently, the confiscation, fine, and penalty were set aside, and the matter was remanded for quantifying duty after granting depreciation until the payment date. The Tribunal allowed the appeal based on the grounds of uncontrollable circumstances leading to the appellants' failure to fulfill export obligations. This detailed analysis of the judgment highlights the key issues, arguments presented by both parties, relevant legal precedents, and the Tribunal's ultimate decision based on the facts and legal principles involved in the case.
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