9911796707
TMI Blog2012 (11) TMI 517X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant M/s. Trans Freight Containers Ltd., Tarapur are a 100% EOU engaged in the manufacture of 'Marine Freight Containers'. They were given a letter of permission to function as a 100% EOU by the Secretariat of Industrial Approval, Ministry of Industry vide letter No. 528(1996)EOB/495/96, dated 18-12-1996 and the said permission was effective from 1-3-1997. They commenced production on 27-2-1997. As per the LOP issued by the Ministry, the appellant were required to achieve net positive foreign exchange earnings and also fulfill the export obligation on a cumulative basis. During the period from 1997-98 to 2001-02 the appellant imported raw materials duty-free worth Rs. 62.20 crores without payment of customs duty under Notification No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notice also proposed to recover excise duty amounting to Rs. 92,84,664/- in respect of goods procured indigenously during the period 1997-98 to 2000-01. Interest on the above duty demand, confiscation of the goods under Section 111(o) of the Customs Act, 1962, imposition of penalty on the appellant under Rule 173Q and 209A of the erstwhile Central Excise Rules, 1944 and Rule 25(1) of the Central Excise Rules, 2002, imposition of penalty under Section 112(a) of the Customs Act, 1962 and Section 72(1)(b) of the said Customs Act, a personal penalty on Shri Ashok Dalmia, Director of the appellant-firm under Section 112 of the Customs Act were also proposed in the said notice. The notice also proposed cancellation of the Warehousing Licence of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty-free nor they procured any material indigenously and they had exported goods worth Rs. 9.39 lakhs during the said period. In view of the above, duty demands confirmed in the above order are not sustainable except in respect of goods lying in the bonded warehouse and also in respect of capital goods wherein the duty liability has to be determined, after granting depreciation in terms of Board's Circular No. 14/2004. Further, they had sent certain raw material to the job-worker, some of which are still lying with the job-worker and duty liabilities are to be discharged in respect of these goods also. Inasmuch as they have fulfilled export obligation and also achieved value addition, the confiscation of goods under Section 111(o) is not sus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rival submissions. 5.1 In the instant case, there is no dispute about the fact that during the first five year block period of 1997-98 to 2001-02, the appellant had achieved not only the export obligation but also positive net foreign exchange earning. This is confirmed by the letter dated 4-12-2007 of the Assistant Development Commissioner, SEEPZ, Special Economic Zone, addressed to the Commissioner of Central Excise, Thane-II. With respect to the second five year block period commencing from 2002-03 to 2006-07, it is confirmed in the said letter that the unit has achieved positive NFE of Rs. 9.39 lakhs on cumulative basis. Therefore, question of demand of any customs or excise duty on account of non-fulfilment of export obligation d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hus non-fulfilment of the conditions of notifications under which the goods are obtained duty-free does not arise at all. Consequently, confiscation of goods under Section 111(o) of the Customs Act, 1962 cannot be upheld as also the imposition of penalty under Section 112(a) Customs Act, 1962. Same holds good in respect of confiscation proposed under Rule 173Q/Rule 25 of the Central Excise Rules, as it stood at the relevant time and consequent imposition of penalty. The ratio of the order in the Navbharat case cited supra applies squarely to the facts of the present case. 5.4 In view of the above, we set aside the impugned order and direct the Commissioner to re-quantify the duty amount only in respect of the raw materials and consuma ..... X X X X Extracts X X X X X X X X Extracts X X X X
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