2014 (11) TMI 784 - AT - Customs

Remission of duty - Theft of goods - dispute traveled up to the Tribunal, who rejected the assessees request to allow remission of duty - matter was remanded for re-quantification of the said duty and to finalize interest rate - Commissioner restricted the duty foregone on components holding that while imposing duty Revenue travelled beyond SCN - Held that - it is not a case where the demand of duty foregone by the importer in terms of notification No. 137/2000 Cus at the time of import was the subject matter of dispute. Admittedly, the duty free import components already stand utilized by the appellant in the manufacture of their final product. The said final product has not been exported and was stolen. The Tribunal has denied remission of duty in respect of said stolen goods. As such, the assessee was required to pay duty on their final manufactured goods which by the process of stealing has gone into the DTA stream. As such, the duty has to be confirmed on the value of said final product. Revenue has confirmed the duty by debiting the FOB value on the said goods cleared under DTA. There is no value available inasmuch as the goods were not being cleared by the appellant in DTA routine /normal course. The assessee would also have no alternate value of said goods. As such, we agree with the Revenue that duty of ₹ 28,73,326/- which was sought remission for, are required to be confirmed. However, in case of interest rate of 15%, applied by the Commissioner is upheld inasmuch as there is no challenge of the same in the appeal of Revenue. We accordingly, allow the Revenue s appeal to that extent. However, penalty is not imposable - Decided partly in favour of assessee.

Summary

Issues:
1. Denial of remission application for duty on stolen goods.
2. Correct quantification of duty and interest rate.
3. Dispute regarding duty foregone on imported components.
4. Imposition of penalties on importing firm and other respondents.

Issue 1: Denial of Remission Application for Duty on Stolen Goods:
The case involved appeals by the Revenue against the Commissioner's order denying remission of duty for stolen periscopes. The Tribunal upheld the denial of remission based on a previous decision, rejecting the assessee's stand. The Commissioner's order was remanded for correct quantification of duty and interest rate, focusing on the stolen goods' value and duty demand.

Issue 2: Correct Quantification of Duty and Interest Rate:
In the remand proceedings, the Commissioner considered the imported components' usage in stolen goods and decided to demand duty based on the components' value cleared under a specific notification. The duty demand was restricted to the duty foregone on components alone, with interest leviable at 15%. The Revenue contested this decision, arguing that duty should be confirmed on the stolen final product's value, not on imported components.

Issue 3: Dispute Regarding Duty Foregone on Imported Components:
The Tribunal found in favor of the Revenue, emphasizing that the main dispute was about remission of duty on the stolen final product, not on imported components. The duty was confirmed based on the stolen final product's value, as it had not been exported and was stolen, entering the domestic market. The Revenue's appeal was allowed concerning duty confirmation, but the interest rate of 15% was upheld.

Issue 4: Imposition of Penalties on Importing Firm and Other Respondents:
Notably, the first order did not impose penalties on the importing firm or other respondents. As there were no penalties initially, the appeals by the Revenue regarding penalties could not be entertained. Therefore, the appeals on penalties were rejected, and all appeals were disposed of accordingly.

This judgment clarified the distinction between duty on imported components and duty on stolen final products, emphasizing the duty confirmation on the stolen goods' value. The decision also highlighted the importance of penalties being imposed in the initial order to entertain appeals related to penalties in subsequent proceedings.