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2017 (9) TMI 1133 - AT - CustomsWaiver of interest demanded - Warehouse of goods - equipment and goods were imported for the purpose of 100% EOU. But due to unforeseen reasons, the project could not be started and there was no question of exporting the goods - Held that - The purpose of 100% EOU has been defeated for the unforeseen reasons. Undoubtedly, goods and equipments were imported where customs duty was also not paid. For paying duty belatedly the interest is leviable as per the ratio laid down by the Hon ble Supreme Court in the case of CIT Vs. Sant Ram Mangat Ram Jewellers 2003 (1) TMI 10 - SUPREME Court . It may be mentioned that ignorance of law is no excuse - demand of interest upheld - appeal dismissed - decided against appellant.
Issues:
- Appeal against order-in-Original No. 100/2013 dated 30.09.2013 for the disputed period Jan 2006 to Oct 2011. - Import of goods for Integral Pearl Cultivation project under 100% EOU scheme. - Dispute regarding payment of interest on duty for goods imported but not used for export. - Applicability of circular no. 473/7/2005 for waiver of interest. - Arguments based on precedents like Business Process Technologis (I) Pvt. Ltd. and Stelfast India Pvt. Ltd. - Department's stance citing Pratibha Processors Vs. UOI for levy of interest and penalty. - Lack of manufacturing activity leading to no export under 100% EOU scheme. - Legal principles regarding levy of interest for belated duty payment. Analysis: The case involves an appeal against order-in-Original No. 100/2013 for the period Jan 2006 to Oct 2011, concerning the import of goods for an Integral Pearl Cultivation project under the 100% EOU scheme. The appellant imported items for export purposes, but due to unforeseen circumstances, the project did not commence, leading to a dispute over the payment of interest on the duty for the unused goods. The appellant argued for the waiver of interest citing circular no. 473/7/2005 and relied on precedents like Business Process Technologis (I) Pvt. Ltd. and Stelfast India Pvt. Ltd. However, the Department contended, referencing Pratibha Processors Vs. UOI, that interest is leviable for delayed duty payment, asserting the appellant's intentional non-payment of interest justifying penalty imposition. Upon review, the Tribunal noted the absence of manufacturing activity and subsequent export, rendering the 100% EOU scheme's purpose unfulfilled due to unforeseen reasons. Considering the facts and legal precedents, the Tribunal held that interest on belated duty payment is applicable, as established by the Supreme Court's ruling in CIT Vs. Sant Ram Mangat Ram Jewellers. Additionally, the Tribunal emphasized that ignorance of the law does not excuse non-compliance, citing the Calcutta High Court's decision in CESC Ltd. Vs. Dy CIT. Consequently, the Tribunal upheld the impugned order, dismissing the appellant's appeal, as there were no grounds for interference based on the presented arguments and legal principles. In conclusion, the judgment underscores the importance of timely duty payment, even in cases of unforeseen circumstances affecting project implementation under special schemes like 100% EOU. The decision reaffirms the legal principles governing interest levies and penalties, emphasizing compliance with statutory obligations despite challenges faced by the appellant in executing the intended project.
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