2020 (3) TMI 424 - AT - Customs

100% EOU unit - Debonding - Demand of Differential Duty - allegation that the appellant is liable to pay duty at the rate prevailing at the time of import/procurement of the goods, whereas appellant paid the duty at the rate prevailing at the time of debonding of the unit - benefit of N/N. 52/2003-Cus dated 31.03.2003 and N/N. 22/2003-CE dated 31.03.2003. HELD THAT - The issue decided in the case of SAHUWALA HIGH PRESSURE VERSUS COMMISSIONER OF CUSTOMS, AND SERVICE TAX VISAKHAPATNAM CUS 2020 (3) TMI 272 - CESTAT HYDERABAD where it was held that for imported capital goods, the appellant is liable to pay duty at the rate of duty prevailing on the date of debonding and the appellant is liable to pay duty for indigenously procured capital goods at the rate of duty prevailing on the date of debonding. Thus, for imported capital goods, the appellant is liable to pay duty at the rate of duty prevailing on the date of debonding - the appellant is liable to pay duty for indigenously procured capital goods at the rate of duty prevailing on the date of debonding - no interest is payable by the appellant. The Revenue is directed to calculate the duty at the rate prevailing on the date of debonding. If any, amount is payable by the appellant, the same is shall be paid within one month - appeal disposed off.

Summary

Issues:
1) Liability to pay duty at the rate of import or debonding
2) Liability to pay interest for the intervening period

Issue No.1:
The appellant contested the demand for differential duty based on Notification No. 52/2003-Cus and Notification No. 22/2003-CE, arguing that duty should be paid at the rate prevailing at the time of debonding, not import. The Tribunal analyzed the notifications and Section 15 of the Customs Act, determining that duty is payable at the debonding rate. For imported capital goods, duty was to be paid at the debonding rate, and for indigenously procured capital goods, duty was also to be calculated at the debonding rate. The appellant's liability was confirmed based on the prevailing duty rate at the time of debonding.

Issue No.2:
Regarding the liability for interest, the Tribunal referred to Notification No. 132/2004-Cus exempting interest on customs duties for export-oriented units. Citing a previous case, the Tribunal ruled that the appellant was not liable to pay interest for the period when capital goods were warehoused. The decision specified that no interest was payable by the appellant, aligning with the exemption under the notification. The order directed the Revenue to calculate the duty at the debonding rate, with any payable amount to be settled within one month, thereby disposing of the appeal.

This detailed analysis of the judgment from the Appellate Tribunal CESTAT Hyderabad highlights the interpretation of relevant notifications and legal provisions to determine the appellant's duty liability and interest obligations, providing a comprehensive overview of the issues involved and the Tribunal's decisions on each point.