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TMI Blog2008 (11) TMI 471X X X X Extracts X X X X X X X X Extracts X X X X ..... ured duty free in terms of other notifications applicable to procurement of indigenous goods. They exported only one consignment on account of one Sai industries after manufacturing using the capital goods imported duty free. They faced problem in running the unit and got in principle approval for de bonding vide letter dated 2-6-2005 from the Development Commissioner. Meanwhile, they were issued with a show cause notice dated 13-11-2004 seeking to demand customs duty on the capital goods imported by them and to demand excise duty on the capital goods locally procured by them inasmuch as they have not fulfilled the export obligation stipulated. The appellant submitted that it was a case of failure of business and that they wanted to relinqu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t CDR reiterated the findings of the Commissioner. She submits that the appellant have not fulfilled the export obligation to any significant extent. The question of their relinquishing title when the goods have been confiscated does not arise. She seeks upholding of the order of the Commissioner. 6. We have carefully considered the submissions and perused the records. No allegation of any irregularity in the import/local procurement has been made; there is no allegation of any diversion of the imported/locally procured goods for a purpose other than the intended purpose have been made or found. This is a peculiar case where the appellants seek permission to destroy the goods which they have procured after investing large amount of mo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are development unit; and (b) the procedure specified by the Assistant Collector of Customs is followed. Explanation - The consultancy fees received by software development units in convertible foreign currency/for consultancy service for development of software 'on site' abroad shall be deemed to be exports for the purposes of fulfilment of export obligation under this notification". Further, the CBEC has issued circular F. No. 305/215/97-FTT dealing with destruction of goods imported under Notification No. 133/94 as such. The relevant portion of the circular is re-produced below :- "The issue has been examined by the Board. It is clarified that action taken under the rescinded seven notifications will be deemed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the capital goods waiving liability to duty. Therefore, we are of the
view that the present case is squarely covered by the situation envisaged in para 7(ii) of the Notification No. 133/94. Under these circumstances, we hold that there is no scope for demand of duty, and imposition of penalties which are accordingly to be set aside. Accordingly, we set aside the demand of penalty and the penalties imposed on the appellants.
8. However, the learned Advocate is not challenging the order of confiscation. The impugned goods may be disposed/destroyed in accordance with law.
9. Appeal is disposed of in the above terms.
(Dictated and pronounced in the open Court) X X X X Extracts X X X X X X X X Extracts X X X X
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