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TMI Blog2017 (6) TMI 1133X X X X Extracts X X X X X X X X Extracts X X X X ..... oms authorities for sub-leasing a part of the premises in 5th Floor alongwith the equipments situated therein to M/s. Sykes Enterprises (India) Pvt. Ltd. on inter unit transfer basis (IUT). In compliance of the permission granted, HCL de-licensed and handed over the part of the premises alongwith all the equipments to M/s. Sykes. However, the other connected formalities as prescribed vide Public Notice No.104/2001 dated 17/10/2001 issued by Bangalore Customs Commissionerate read with the relevant Customs and Central Excise Notifications, were not followed. No shipping bills were filed by HCL for transferring these assets to M/s. Sykes. On expiry of the agreement with M/s. Sykes, the premises alongwith all the equipments were handed over back to M/s. HCL in September, 2003. Subsequently, M/s. HCL entered into another agreement with M/s. Huawei Technologies for sale of the entire assets in 5th floor. After obtaining the necessary permissions from STPI as well as Customs authorities, all the equipments were transferred to M/s. Huawei by filing necessary shipping bills. M/s. Huawei also got their private bonded warehouse license endorsed for the additional premises at the 5th Floor. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been challenged before us in the appeal filed by HCL. In the grounds of appeal and also the arguments advanced by the ld. Advocate, it has been emphasised that the goods were not removed from the warehouse but remained in the very same premises even though a constructive movement is effected through IUT to M/s. Sykes in the first instance and later to M/s. Huawei. Such constructive movement has also been effected only after proper approvals from both the STPI and Customs Authorities. Further, it has been submitted that it is a lapse on the part of M/s. Sykes, and not on the part of HCL, that the Customs formalities like warehouse license as well as bonding have not been observed. In any case, it has been submitted that without any removal of the goods from the warehouse, Section 72 can have no application for demand of duties on the goods. The appellants have also relied upon many case laws including that of Honeywall Technology Vs. C.C., Bangalore - 2008 (231) E.L.T. 592 (Tri.-Bang.). It was argued by the ld. Counsel that in the above case, the Tribunal has taken the view that no duty can be demanded and there can be no confiscation of goods for technical violation. In that ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d warehouse of M/s. Huawei w.e.f. 14.11.2003 and from that date there is no duty liability on the said goods. 7. In view of the facts as above, we are of the view that duty liability has arisen in respect of the goods in the part of 5th Floor only for the period 06.08.2002 to 13.11.2003. The customs duty on the imported goods as well as Central Excise Duty on the indigenous goods has been demanded in the impugned order. However, we are of the view that it would suffice, if the appellant is asked to pay interest on the duty liabilities for the above period in respect of both imported and indigenous goods. Such interest amount have also been quantified in the impugned order as Rs. 2,62,922/- payable on the customs duty amount of Rs. 10,92,960/-. The interest amount of Rs. 27,571/- is held as payable on the Central Excise Duty of Rs. 1,21,100/-. We uphold the order of confiscation of these goods which have been allowed to be redeemed on payment of fine and penalty. The penalty imposed on M/s. Sykes also is also upheld. 8. M/s. Huawei have challenged the penalty amount of Rs. 50,000/- imposed on them in terms of Section 112 (b) of Customs Act as well as Rule 25 of the Central Excise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision of the Tribunal in the case of Sun Microsystems India Pvt. Ltd. (supra). We are of the view that the cited case settles the issue in favour of the appellant. The Tribunal in that case held as follows:- 6. On a very careful consideration of the issue, we find that in the present case the goods, even though they are obsolete, are still in the bonded premises, they have not yet been cleared. Moreover, it is on record that the bonded premises licence is valid till 4-5-2009. Therefore, in terms of the Board's Circular 7/2005 dated 14-2-2005, the warehousing period automatically gets extended. Extracts of the said circular are given below : The matter has been considered by the Board. The EOUs import capital goods frequently especially in the software development sector to keep pace with the development of technology. The units are required to be always in its toes to apply for extension of warehousing period within the time frame provided in the law. There is no denying that this practice does distract the units attention from export production and the units are always busy in preparation of obtaining timely extension of warehousing to avoid action under law for de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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