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Issues: Duty demand confirmation, penalty imposition, compliance with exemption notifications, continuous usage of capital goods and raw materials, jurisdiction of the Commissioner, waiver of predeposit and stay of recovery.
Duty Demand Confirmation and Penalty Imposition: In this case, a duty demand of Rs. 2,09,54,801/- has been confirmed against M/s. Yuil Measures India and a penalty of Rs. 10 lakhs has been imposed on the company. Additionally, a penalty of Rs. 1 lakh has been imposed on the Director of the company. The demand arises from the denial of duty-free import benefit of capital goods and raw materials due to the unutilized status of the imported goods for several years, violating the conditions of relevant Notifications. The Department invoked provisions of Section 111(o) of the Customs Act, 1962 and Rule 173Q(2) of the Central Excise Rules, 1944. Compliance with Exemption Notifications and Continuous Usage Requirement: The appellant argued that they had imported capital goods and raw materials for their export-oriented unit, fulfilling part of their export obligation. They faced delays in production due to various reasons, including market competition. The appellant contended that continuous usage of imported goods was not a condition in the relevant Notifications, and since they had utilized the goods for a period, duty liability should not arise. However, the opposing party highlighted that the goods were not continuously used for production, leading to non-fulfillment of Notification conditions. The Tribunal emphasized that continuous usage was necessary to claim duty-free import benefits, citing a relevant Supreme Court judgment. Jurisdiction of the Commissioner and Waiver of Predeposit: The jurisdictional aspect was raised concerning the authority exercising powers under Notification 133/94. The Tribunal noted that the Commissioner could exercise powers conferred on the Assistant Commissioner. Regarding financial hardship and the plea for waiver of predeposit, the Tribunal observed that the mere registration of the company's application by BIFR did not automatically warrant waiver. After considering all aspects, including the objective of duty-free import for export goods manufacturing, the Tribunal directed the appellant to deposit specified amounts towards duty and penalty within a given timeframe. Failure to comply would result in the vacation of stay and dismissal of appeals. In conclusion, the Tribunal found that continuous usage of imported goods was essential to claim duty-free import benefits under the relevant Notifications. The appellant was directed to make specified deposits within a set timeframe to continue the stay of recovery pending appeals. The judgment emphasized the importance of fulfilling obligations and objectives set out in exemption Notifications for duty-free imports.
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