9911796707
TMI Blog2006 (5) TMI 40X X X X Extracts X X X X X X X X Extracts X X X X ..... hange. The Revenue conducted investigation and it was found that the capital goods imported duty free have not been installed within the stipulated period and utilised for the production of specified goods within the period stipulated by the Board of Approval. Certain goods were procured indigenously duty free under CT3 procedure. It was alleged that the appellants failed to prove that the indigenous capital goods procured duty free had been installed and utilised for production of specified goods within the period prescribed by the Board of Approval. Hence show cause notices were issued for confiscation the impugned goods and also demand of Customs duty and Central Excise duty on the impugned goods. The Adjudicating authority held that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... commence commercial production within the period mentioned in the Letter of Permission. The Jurisdictional CSEZ office granted extension from time to time. The Ministry of Commerce and Industries, E.O.U. section, vide their letter dated 23-2-2002 extended the permission up to 30-4-2002. The appellants started production on 26-4-2002. This fact was communicated to the Development Commissioner and Jurisdictional Assistant Commissioner on 27-4-2002. The appellants in their letter dated 3-6-2002 informed the Assistant Commissioner, CSEZ, that the trial run of the plant on 26-4-2002 was actually commercial production. The Assistant Commissioner, CSEZ, in his letter dated 10-6-2002 communicated to the Deputy Commissioner of Customs Division that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anding duty or imposition of penalty without prior sanction of the Development Commissioner In-charge of the unit. The Board Circular No. 21/95, dated 10-3-95 was relied on. The above Circular is binding on the Department officers. In view of these reasons, the impugned order for demand of duty, confiscation of the impugned goods, imposition of penalty and interest is not sustainable. (vii) The Commissioner has erred in holding that the appellants has misled or misdeclared. The appellants had correctly stated that the commercial production had started on 26-4-2002. The appellant was forced to say on being shown the annual reports that the commercial production started only in July/August, 2003. He had no inten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0-3-2002 has communicated that the Board of Approval has extended the LOP up to 30-4-2002 only and no further extension would be granted. It is also proved beyond doubt that the appellant's unit has not been able to achieve the minimum value addition and fulfil export obligation. (iii) It has been rightly held vide Paras 55 to 67 of the impugned order that what was started on 26-4-2002 is only trial run and no commercial production. The export of 26 consignments of samples having no commercial value to various countries can by no stretch of imagination be considered as proof of commencement of commercial production. (iv) The annual report of the appellant unit for the year ending 31-3-2002 and 31-3-2003 mentioned that the commercial produ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conclusion has been arrived at by the Development Commissioner. The Circular No. 21/95-Cus., dated 10-3-95 is reproduced below :- "Demand - Show cause notice for recovery of customs duty on goods imported by 100% EOU - Clarification Circular No. 21/95-Cus., dated 10-3-1995 [From F. No. 307-2-91-FTT] Government of India Ministry of Finance (Department of Revenue) New Delhi. Subject: Issue of show cause notice for recovery of Customs duty on goods imported by 100% EOU - Regarding. A number of instances have come to the notice of the Board where 100% EOU's had imported capital goods, raw materials and other permissible items under Notification No. 13/81-Cus., dated 9-2-1981 but have failed to export any goods or have clos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ely inform the Development Commissioner in case a 100% EOU ceases production prematurely or fails to commence production or export within the stipulated period. In case the Development Commissioner initiates action against the unit for non-fulfillment of export obligation etc. simultaneously the Customs authorities should issue show cause notice for failure to comply which conditions of Notification 13/81-Cus., dated 9-2-1981 - The demand of duty should be confirmed only after a definite conclusion has been arrived at by the Development Commissioner." In the present case, there is nothing on record to show that the duty has been confirmed after a definite conclusion has been arrived at by the Development Commissioner. In these circum ..... X X X X Extracts X X X X X X X X Extracts X X X X
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