2005 (5) TMI 231 - AT - Central Excise

Summary

Issues:
Violation of export obligation by an EOU, demand of custom duty, central excise duty, and penalties, cancellation of warehouse license, imposition of penalties on the director in charge, extension of bonding/warehousing period, waiver of interest for EOUs, non-application of Board's orders, levy of interest, violation of Customs Act, 1962.

Analysis:
The case involved M/s. Bee Internature, a 100% EOU engaged in manufacturing 'Automatic Plain Paper Copier.' The issues identified by the AC C. Ex. Bouor II Divisions included imports under various notifications, non-fulfillment of export obligations, and contravention of EOU license conditions and EXIM Policy. A show cause notice was issued detailing the charges on 12-9-03.

The Commissioner, after hearing the noticees, ordered the demand of custom duty, central excise duty, and penalties on M/s. Bee International and its Director in charge. The penalties were imposed under various sections of the Customs Act, 1962 and Central Excise Rules, 1944. The warehouse license was cancelled, and penalties were imposed for non-fulfillment of export obligations and violation of relevant notifications.

After hearing both sides, it was found that penalties under certain rules could not be upheld for an assessee under the 100% EOU scheme. Duty demands for violation of certain rules could not be upheld as they did not apply to EOUs. The order highlighted the need for the extension of the bonding/warehousing period and waiver of interest for EOUs as per Board's directives.

The judgment emphasized the waiver of interest for EOUs under specific notifications and circulars. It also discussed the policy directives regarding the extension of bonding periods for EOUs and the need for compliance with Board's orders. The order called for the setting aside of duty demands and interest, as well as penalties that could not be upheld due to non-clearance of goods on expiry of warehousing period.

In conclusion, the order set aside the previous decision, allowed the appeals, and directed the disposal of the case as per the findings. The judgment was pronounced in court on 27-5-2005.