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2018 (10) TMI 1464 - AT - Central Excise100% EOU - private bonded warehouse - application for de-bonding of indigenous capital goods and raw materials - extension of Warehousing period - Circular No.7/2005-Cus. dated 14.2.2005 - Held that - Once the warehousing license of the appellant is renewed up to 2014 as shown by the appellants, then consequently as per the Circular, bonded warehousing period has automatically renewed up to 5.7.2014 and at the time of de-bonding, both the licenses were valid and in existence and therefore, demanding the duty and imposing penalty is not sustainable in law - appeal allowed - decided in favor of appellant.
Issues:
Appeal against common impugned order dated 18.1.2018 passed by Commissioner (A) regarding violation of provisions of Section 72(b) of the Customs Act, 1962 in de-bonding of indigenous capital goods and raw materials under 100% EOU scheme. Analysis: The appeals were filed against a common impugned order by the Commissioner (A) where the appellants, manufacturers of plastic processing machines under Chapter 84 of the Central Excise Tariff Act, sought de-bonding of goods from their private bonded warehouse. The issue arose as the validity period of the warehoused goods had expired, and no extension was sought, potentially violating Section 72(b) of the Customs Act, 1962. Show-cause notices were issued, leading to confirmation of demand by the original authority, prompting the appeals. The appellant's counsel argued that the impugned order failed to consider facts, departmental Circular, and binding judicial precedents. They contended that the warehousing license had been extended until July 2014, automatically extending the warehousing period of capital goods. Reference was made to Circular No.7 of 2005-Cus. and a previous Tribunal decision supporting this stance. In response, the learned AR supported the impugned order. Upon review and considering Circular No.7/2005-Cus. dated 14.2.2005, the Judicial Member opined that since the warehousing license was renewed until 2014, as evidenced by the appellants, the bonded warehousing period automatically extended until 5.7.2014. Consequently, at the time of de-bonding, both licenses were valid, rendering the duty demand and penalty imposition legally unsustainable. As a result, the impugned order was set aside, and the appeals of the appellants were allowed. The operative portion of the order was pronounced in Open Court on 25/10/2018.
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