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TMI Blog2009 (12) TMI 812X X X X Extracts X X X X X X X X Extracts X X X X ..... UPSs and an accessory warehoused were not found during verification by the officers in the assessee s warehouse and that the missing goods had been assessed for warehousing extending inadmissible benefit of Notification No. 96/03-Cus., its successor Notification No. 52/03-Cus. and 22/03-C.E. extended to goods procured by units under EOU scheme. The demand was made under Section 72(a) of the Customs Act, 1962 (the Act). Order No. 24/08 had decided show cause notice dated 1-1-2008 and found that certain warehoused capital goods were not found in the warehouse and confirmed duty demand under Section 72 (a) of the Act. Penalties were also imposed on APC for having rendered the impugned goods liable for confiscation u/s 111(o) of the Act. 2. Facts in brief are that pursuant to visit to the premises of the appellant working under the 100% EOU scheme, in connection with its application for extension of 232 warehousing bonds, the officers found that the assessee could not account for 55 pieces of UPSs and an accessory and also several other capital goods. The assessee could not identify and show to the officers these goods in the warehouse. Adjudicating allegations of irregular clearan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods had been certified to be essential by the licensing authority and their import had been sponsored by the said authority. It was not denied by the authorities that the subject goods were entitled to exemption as proto-type/technical sample subject to fulfillment of conditions. The duty had been demanded in the orders of the original authority under Section 72(a) read with Section 71 of the Act. These provisions could be invoked to demand duty on warehoused goods only if the goods had been removed from the warehouse. The confirmation of demand under Section 72(a) of the Act was not sustainable as the finding of their removal was not backed by evidence. The authorities rendered the finding that the warehoused goods had been removed without a matching proposal in the show cause notice, whereas the order-in-original proceeded on the basis that the assessee had failed to produce the impugned goods before the officers for verification. The appellant s consistent stand is that the impugned goods had not been removed from the warehouse. The revenue raised the demand under Section 72(a) of the Act without discharging the burden to establish that the impugned goods had been clandestine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. - 2004 (170) E.L.T. 129 (S.C.), it is submitted that the assessee had the option to claim exemption not sought at the initial stage. The taxable event in the case of warehoused goods was when they were removed from the warehouse as held by the Apex Court in the case of LML Ltd. v. CCE, 2002 (142) E.L.T. 273 (S.C.) and UOI v. Apar Pvt. Ltd. - 1999 (112) E.L.T. 3 (S.C.). The impugned order was contrary to the above settled position. The appellant was entitled to depreciation for the warehoused goods as well as waiver of interest in terms of notifications and circulars of the Govt. of India in respect of goods used for manufacture in the warehouse. Demanding duty on the value of the goods at the time of import was contrary to the ratio of the following case laws. (i) I-Flex Solutions Ltd. v. CC - 2005 (184) E.L.T. 259 (T) (ii) PSI Data Systems Ltd. v. CC - 2006 (200) E.L.T. 612 (T) (iii) Chemcrown (India) Ltd. v. CC - 2004 (164) E.L.T. 444 (T). CBEC Circular 29/2003-Cus., dated 3-4-2003 also provided that warehoused capital goods should be allowed depreciation as envisaged in the Exim Policy and demand on warehoused goods limited to the depreciated value. When the d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expiration of the period during which such goods are permitted under Section 61 to remain in a warehouse; (c) where any warehoused goods have been taken under Section 64 as samples without payment of duty; (d) where any goods in respect of which a bond has been executed under [Section 59 [* * *]] and which have not been cleared for home consumption or exportation are not duly accounted for to the satisfaction of the proper officer, the proper officer may demand, and the owner of such goods shall forthwith pay, the full amount of duty chargeable on account of such goods together with all penalties, rent, interest and other charges payable in respect of such goods Section 71 reads as follows : Section 71. Goods not to be taken out of warehouse except as provided by this Act. - No warehoused goods shall be taken out of a warehouse except on clearance for home consumption or re-exportation, or for removal to another warehouse, or as otherwise provided by this Act. 4.1 We find that the impugned goods were assessed at the time of import for warehousing in terms of Notifications Nos. 96/03 or 52/03-Cus. and 22/2003-C.E. This assessment is claimed to have been supported by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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