2018 (11) TMI 768 - AT - Customs

Demand of Excise duty - benefit of N/N. 1/95 denied - goods bought for the purpose of export - Held that - The appellant has used 10% of the floor space for establishing the business facility called incubation centre which was used for commercial purpose and it was not solely used for the purpose of export. We also find that there are no allegations against the appellant that there was no export done by the appellant. There are no established facts that the goods which were brought in by availing benefit of Notification No.1/95-CE were not used for export - that part of the impugned order which relates to confirmation of demand, interest and penalty by denying benefit of Notification No.1/1995 is not sustainable. Appeal allowed in part.

Summary

Issues:
Violation of conditions of exemption notifications under Customs and Central Excise Act; Confirmation of demands raised; Imposition of penalties under relevant sections.

Analysis:
The case involved two appeals against a common Order-in-Original passed by the Commissioner, Customs, Central Excise & Service Tax, Noida. The Appellant had approval to set up an Industrial Park with specific usage allocations. They also entered into agreements for setting up a Software Technology Park (STP) and obtained a Customs Bonded Warehouse License. The issue arose when it was alleged that goods imported or procured duty-free were not used solely for software development for export, leading to a Show Cause Notice (SCN) and subsequent demands for duty recovery, interest, and penalties. The Order-in-Original confirmed the demands and imposed penalties, prompting the appeals before the Tribunal.

The Appellant argued that the goods were used for export purposes as required by the exemption notifications. They contested the denial of benefits under Notification No.1/95-CE and Notification No.22/2003-CE, highlighting that the goods were brought in for specified purposes and that the Revenue failed to prove violations. The Appellant also challenged the imposition of personal penalties on the Director.

The Tribunal analyzed the conditions of the relevant notifications and found that while the Appellant used 10% of the floor space for commercial purposes, there was no evidence of non-export use of the goods. The Tribunal held that the demands based on denial of benefits under Notification No.1/95-CE and Notification No.22/2003-CE were unsustainable as there was no proof of non-export usage. However, the Tribunal upheld the demand for Customs duty under Notification No.153/93-CUS as the imported goods were found to be used for purposes other than export, along with interest and penalties. The Tribunal also found the personal penalty on the other appellant to be unsustainable, as the issue primarily revolved around the interpretation of notifications.

In conclusion, the Tribunal partially allowed one appeal and fully allowed the other, rejecting the demands related to Central Excise duty exemptions and personal penalties while upholding the demand for Customs duty under specific notifications along with associated interest and penalties. The judgment was pronounced on 15.11.2018 by the Tribunal.