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TMI Blog2009 (12) TMI 396X X X X Extracts X X X X X X X X Extracts X X X X ..... 2,54,91,236/-. The assessee had also procured various indigenous capital goods valued at Rs. 55,57,936/-involving excise duty of Rs. 5,23,309/- and indigenous raw materials valued at Rs. 5,19,088/- involving excise duty of Rs. 93,436/- with out payment of excise duty to the tune of Rs. 6,16,745/- availing conditional ex emption under Notification No. 1/95-CE, dated 4-1-1995 as amended. 2. The EOU commenced commercial production from 19-11-1995 but failed to fulfill the export obligation during the period from 1995-96 to 2000-2001. As such, the assessee appeared to have contravened the conditions (3) & (4) of the Notification No. 13/81-Cus., dt. 9-2-1981 as amended and contravened the conditions of Notification No. 1/95-CE, dated 4-1-1995 as amended for duty free procurement of indigenous goods. 3. Adjudicating the allegations of the appellant procuring capital goods and raw materials and not satisfying the conditions to qualify for the exemption availed under the EOU scheme, the Commissioner passed the impugned order in de novo proceedings. Vide the impugned order No. 3/08-Cus. (de novo) (Commr.) dated 16-5-2008, the Commissioner demanded customs duty of Rs. 1,08,05,335/- toward ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 5. In the impugned order, the Commissioner considered the pleas made by the appellant in response to the show cause notice supported by case law. She made the following observations on the case laws cited by the appellants: (i) Suvarna Aqua Farm & Exports Ltd. v. Commissioner of Cus., Guntur 2005 (190) E.L.T. 284 (Tri. - Bang.) In this case, the Hon'ble Tribunal held that on debonding, depreciation is to be given up to the date of duty payment and not till the date of debonding and set aside the penalty, fine and confiscation for non-fulfillment of export obligation due to production ban by the Apex Court, damage of plant by floods, etc., which were beyond the control of the importer whose bona fides were not doubted. (ii) Natural Stone Exports Limited v. CC (Appeals), Bangalore - 2006 (198) E.L.T. 440 (Tri.-Bang.) The South Zonal Bench of the Tribunal held in this case that duties on ware housed capital goods imported by 100% EOU's cannot be demanded till their clearance from the warehouse, besides findings of similar nature as above. How ever, the Hon'ble Tribunal had also held that duty demand on un-utilised quantity of goods was right. (iii) Premier Granites Ltd. v. CC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aims have not been sustained by the unit. 8. She found that the appellants had ceased its operations on 31-3-1999 and held that the assessee was liable to pay interest on the duty due on capital goods and raw materials from 1-4-1999 till the date of payment of duty. She rejected the assessee's claim for allowing relief in the demand on account of the fact that the. assessee had fulfilled the export obligation to the extent of 5% and had to close the unit for reasons beyond its control. She found that there was no provision in law to allow such benefit. Hence the demand and penalties. 9. The appeal filed by the assessee assails the impugned order on the following points: (1) Non-allowance of depreciation on capital goods upto the date of payment of duty or upto the date, on which capital goods were sold by DRT. (2) Confirmation of duty without giving allowance for exports made. (3) Wrong demand of duty on raw materials (both imported and indigenous) on the ground that only. 60% of the raw material were consumed. (4) Illegal confiscation of capital goods as well as raw materials (both imported & indigenous). (5) Wrong imposition of penalty and redemption fine, which are totall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner rejected this claim of the appellant as not substantiated. We find that it is reasonable to conclude that the EOU had wound up its business for want of business and funds. In this connection-we find that the appellants have rightly relied on the decision of this Tribunal in Pal Industries Ltd. (supra) wherein the Tribunal has observed as follows: "B. Confiscation of the goods & imposition of penalty. We observe that in this case the appellants have come clean before the authorities that it was beyond their control to fulfill the export obligations be cause of various reasons and they could export only a negligible quantity of 1%. Further, there is no allegation in the show cause that the appellants- importer willfully sought to avail of the benefit of Notification with a view to gain any benefit. It is not the case of the department that there was deliberate attempt to avail of the notification by making any mis-declaration. The extent of the failure to fulfill the export obligation does not matter in a situation, as seen from the records that in this case, in fact the appellants had filed bank guarantee and sought for extension of time to fulfill the ex port obligation. But ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... demption fine and penalty on the EOU. 10.1 As regards the depreciation admissible on the value of capital goods for assessment to duty, the appellants rely on Board' Circular No. 27/98- Cus., dated 21-4-1998 which prescribed admissible depreciation and the period of computation. The period of depreciation as per the circular would be counted from the date the capital goods have been put into the manufacturing process in the EOU up to the date they are sought to be cleared to DTA. We find that in the case of Suvarna Aqua Farm and Exports Ltd. (supra), the Tribunal held as follows: "6. On a careful consideration of the submission, we notice that the only question required to be considered in this case is as to whether the appellants are entitled to depreciation on the goods imported and not fully used, for the purpose of calculating the duty and as to whether RF and penalty is imposable. This very issue was considered by the President's Bench in the case of CCE v. Solitaire Machine Tools P. Ltd. (supra) wherein, after due consideration, the Bench held that the depreciation has to be granted till the date of payment of duty in terms of Notifications. Again, the Tribunal, in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X
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