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TMI Blog2009 (1) TMI 692X X X X Extracts X X X X X X X X Extracts X X X X ..... s appeal has been filed against the Oder-in-Appeal No. 82/2007 dated 28-6-2007 passed by the Commissioner of Customs (Appeals), Bangalore. 2. Shri G. Shiva Dass, the learned Advocate, appeared on behalf of the appellants and Smt. Sudha Koka, the learned SDR, for the Revenue. 3. We heard both sides. 4. The appellant are STPI Unit working under EOU Scheme. The point at issue is that they imported certain equipments for use in their 100% EOU free of duty under Notification No. 52/2003-Cus., dated 31-3-2003. It so happened that due to heavy rain, the goods, which were warehoused were substantially damaged. The appellant wrote to the Department that they are entitled for remission of duty under Section 23 of the Customs Act, 1962, as the goods damaged due to rain were not cleared for home consumption. However, Revenue proceeded against the appellants demanding duty on the imported equipments, which were damaged. There was also a proposal for demand of interest. It was the submission of the appellant that damage to the goods had occurred due to seepage of water on account of torrential rains during September and October, 2005. They submitted that they had taken all the precautionar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -2005, informed the Customs and the STPI authorities that the goods may be inspected and in view of the damage caused due to rain and the opinion of Wipro Infotech that the goods could not be used further, they may be granted remission of duty. The Customs officers visited the premises and made investigations. They detained the goods under a memo dated 5-12-2005 and proceedings were recorded under a Mahazar. On the basis of the enquiries, a Show Cause Notice dated 9-5-2006 was issued, which resulted in the adjudication order for the demand of duty. 4.2 The submissions of the learned Advocate are as follows :- (i) The demand of duty is not sustainable, as remission is available under Section 23 of the Customs Act. The networking equipment were damaged. It was submitted that the fact that there is total damage to the equipment is fully accepted by the lower authority. In these circumstances, they ought to have been granted remission of duty under Section 23 of the Customs Act. (ii) A plain reading of the provisions of sub-section (1) of Section 23 shows that once the Assistant Commissioner or Deputy Commissioner is satisfied that the imported goods have been lost on acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submitted that the lower authority did not have the requisite jurisdiction to confirm an amount of this magnitude. The duty demand has been confirmed on the ground that the conditions of Notification 52/2003-Cus., dated 31-3-2003 have been violated inasmuch as the duty free goods have not been to the specified use. It was submitted that the CBEC, vide its Circular dated 17-12-2002, has directed that where Show Cause Notices are issued without invoking the extended period, any Show Cause Notice involving value of goods up to Rs. 20 lakhs are to be adjudicated by Additional Commissioner or Joint Commissioner. In other words, any Show Cause Notice involving a value in excess of Rs. 20 lakhs has to be adjudicated only by the Commissioner of Customs and not by the Assistant Commissioner of Customs involving duty itself in excess of Rs. 1 crore, as has been done in the impugned order. 5. The learned Departmental representative reiterated the impugned order. She said that the Commissioner (Appeals), in the impugned order, has clearly given a finding that Section 23 would not be applicable in the present case. It was argued that Section 23 would be applicable in cases of goods lost, des ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not agree. It is a fact that the goods have become totally useless. Therefore, we have to take it that the goods have been destroyed before their clearance for home consumption. Hence, a careful reading of Section 23, which is reproduced below, shows that the section would be applicable even for the goods, which have become unusable on account of any accident. Section 23. Remission of duty on lost, destroyed or abandoned goods. - (1) Without prejudice to the provisions of section 13, where it is shown to the satisfaction of the Assistant Commissioner of Customs or Deputy Commissioner of Customs that any imported goods have been lost (otherwise than as a result of pilferage) or destroyed, at any time before clearance for home consumption, the Assistant Commissioner of Customs or Deputy Commissioner of Customs shall remit the duty on such goods. (2) The owner of any imported goods may, at any time before an order for clearance of goods for home consumption under section 47 or an order for permitting the deposit of goods in a warehouse under section 60 has been made, relinquish his title to the goods and thereupon he shall not be liable to pay the duty thereon. 6.1 If the goo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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