2017 (9) TMI 1508 - AT - Customs

100% EOU - appellant imported capital goods under N/N. 31/81-Cus. Appellant had sought an exemption for being a 100% EOU on imported capital goods in the year 1988; that the said machinery/capital goods were installed in appellants factory and manufacture goods and cleared for export till 1992 - denial of exemption on the ground of non-fulfillment of export obligation - Held that - there is no dispute as to the fact the appellant has not complied with the export obligation under taken by him when they imported capital goods under N/N. 13/81-Cus. The entire exercise under taken by appellant as to that they are still a EOU as on 08.08.2006, when the DGFT authorities to action of suo-moto de-bonding and de-bonded their EOU, that value of the machinery will be zero if the depreciation is applied, is nothing but a facade - the appellant has no case on merits - appeal dismissed - decided against appellant.

Summary

Issues:
- Confirmation of demand of customs duty against the appellant for foregone duty on imported capital goods under Notification No. 31/81-Cus as a 100% EOU.
- Appellant's claim of exemption as a 100% EOU till 2006 due to non-debonding by DGFT authorities.
- Appellant's argument on the duty payable only at the time of de-bonding for EOU and calculation of depreciated value for duty discharge.
- Non-compliance with export obligation by the appellant leading to demand confirmation.
- Appellant's legal recourse to delay demands and failure to comply with export obligations.
- Dispute regarding EOU status, de-bonding, and plea inconsistency by the appellant.
- Applicability of case laws cited by the appellant.
- Final decision on the appeal and rejection due to lack of merits.

Analysis:
The judgment revolves around the confirmation of demand for customs duty against the appellant for foregone duty on imported capital goods under Notification No. 31/81-Cus as a 100% EOU. The appellant claimed exemption as a 100% EOU till 2006 due to non-debonding by DGFT authorities. The Tribunal noted the appellant's argument that duty is payable only at de-bonding for EOU and the calculation of depreciated value for duty discharge. However, the Tribunal found that the appellant failed to comply with the export obligation, leading to demand confirmation.

Additionally, the Tribunal highlighted the appellant's continuous legal recourse to delay legitimate demands and non-compliance with export obligations, which further weakened the appellant's case. The dispute regarding the EOU status, de-bonding, and plea inconsistency by the appellant were thoroughly examined. The Tribunal dismissed the appellant's plea regarding the statutory bonding period and upheld the impugned order dated 28.05.1999.

Furthermore, the Tribunal addressed the appellant's reliance on case laws, emphasizing the differences in the facts of those cases compared to the present case. The Tribunal concluded that the appellant's avoidance to appear before the authorities with clean hands rendered the cited case laws inapplicable. Ultimately, the Tribunal found the appeal devoid of merits and rejected it, upholding the impugned order.