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TMI Blog2015 (4) TMI 315X X X X Extracts X X X X X X X X Extracts X X X X ..... d only on the basis that certain goods procured free of customs duty or free of central excise duty were not used in the manufacture of the goods for export, or but were written off on becoming the obsolete and for this reason, in terms of the provisions of the notification no.52 /03- Cus and 22/03-CE, the duty would be payable on these goods so written off. There is no allegation in the show cause notice that the goods in respect of which the duty has been demanded had been cleared into DTA . In our view, therefore, duty cannot be demanded in respect of the goods which had been written off. The question of payment of duty would arise only when the goods are cleared into DTA or EOU is allowed to be debonded and is converted into DTA unit, at the time of which, the EOU is required to pay duty on the entire stock of duty free raw materials and capital goods and the stock of finished goods, but this is not the case here. We, therefore, hold that the appellant have prima facie case in their favour . Accordingly, the requirement of pre-deposit of duty demand, interest and penalty by the appellant company and the requirement of pre-deposit of penalty by Shri Rakesh Kumar Vohra , Mana ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unting to ₹ 6,06,27,703 /-from the appellant company under Section 28 of the Customs Act, 1962 and proviso to Section 11 A(1) of the Central Excise Act read with Section 28 AA of the Act, 1962 and Section 11 AA of the Act, 1944 and Rule 4 of the Central Excise Rules, 2002 and along with interest there on under Section 28 AA of the Customs Act, 1962 and Section 11 AA of the Central Excise Act, 1944; (b) imposition of penalty under Section 114 A and 117 of the Customs Act, 1962 and Section 11 AC of the Central Excise Act, 1944 on the appellant company; and (c) imposition of penalty under Section 112 and 117 of the Customs Act, 1962 and Rule 26 of the Central Excise Rules, 2002 on Shri Rakesh Kumar Vohra , Managing Director and Shri Maniesh Gaur, Manager (Commercial) of the appellant company. 2. The above show cause notice was adjudicated by the Commissioner vide order-in-original dated 31.03.2013 by which the Commissioner - (a) confirmed the customs/central excise duty of ₹ 5,42,54,238 /-against the appellant company under Section 28 of the Customs Act, 1962 and under proviso to Section 11 A(1) of the Central Excise Act, 1944 read with conditions of B-17 Bond ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed a detailed account of the raw material/outputs imported which was actually written off, that wherever the inputs / raw materials had been written off, the writing off was only due to damage, breakage or defects, that the manufacturing of the final products involved assembly of the various parts such as populated PCBs, Interfaces, Switches, etc., that since the appellant do not manufacture these parts but procured the same either by importing or buying indigenously free of duty, at the time of receipt of the inputs, the same are thoroughly inspected and defective parts/inputs are returned to the suppliers, that the inputs are, thereafter, stored in the warehouse and re-entered in the stock register and other central excise records and are issued to the production floor as per the requirement under the cover of issue slips which are accounted for in the ERP system of the appellant, that during the process of manufacturing, some of these parts/inputs get damaged, that such inputs are rejected and in this regard a line rejection report is generated manually, that such rejected inputs are placed separately in the warehouse and are destroyed under intimation to the department, that du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for waiver from the requirement of pre-deposit under Section 35 F of the Central Excise Act, 1944. 7. We have considered the submissions from both the sides and perused the records. The appellant are a 100% EOU engaged in the manufacture of data projector and parts thereof for export. They procure the components and raw materials either through imports without payment of customs duty under notification no.52 /03- Cus or procure domestically free of central excise duty under notification no.22 /03-CE. The entire duty demand against the appellant is based on the allegation that during the period from 2007-2008 to 2010-11, the appellant company as per their balance sheet for these years had written off the inputs/raw materials either procured free of central excise duty under notification no.22 /03-CE or procured free of customs duty under notification no.52 /03- Cus and it is on this basis that the duty on these inputs/raw materials is being demanded on the ground that the same have not been used for manufacture of the finished goods for export. The value of the inputs written off during the period of dispute is Rs . 18,28,47,170/- on which the duty payable has been determined as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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