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TMI Blog2017 (9) TMI 1276X X X X Extracts X X X X X X X X Extracts X X X X ..... ction and export of polished Granite Slabs, Tiles and Monuments. After import of goods under notification No.13/1981-Cus. dt. 09.02.1981 and 53/1997 Cus. dt. 03.06.1997 and procurement of indigenous goods under Notifications No.183/1981-CE dt. 02.06.1981 and 1/1995-CE dt. 04.05.1995, the assessee started commercial production from 22.07.1998. Due to labour problem, the unit was locked out in December 2001 and permanently closed from July 2002. For not complying with the prescribed export obligation, the Development Commissioner imposed a penalty of Rs. 2 lakhs on the assessee in terms of an order dt. 20.03.2002.After closure of the unit, LOP was cancelled by the Development Commissioner in terms of his letter dt. 02.09.2005. Subsequently, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... um vide Appeal C/240/2009 & E/611/2009. Department is also aggrieved with the impugned order on the grounds that no order has been passed for confiscating subject goods under Section 111 (o) of Customs Act, 1962 and that adjudicating authority has also failed to impose penalty under Rule 173Q of Central Excise Rules, 1944. Hence Appeal C/242/2009. 2. On 08.08.2017, when matter came up for hearing, on behalf of assessee, ld. Advocate Shri S. Murugappan reiterated the grounds of appeal. He also made written and oral submissions which can be summarized as follows : (i) The adjudicating authority has confirmed entire duty liability, inter alia, for the reason that assessee did not fulfil prescribed export obligation. It is further contended t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the grant of depreciation in respect of capital goods. (vi) In respect of appeal C/242/2009, ld. advocate submits that the prayer of department for confiscation of the goods has no legal basis. So also there is no nexus for imposition of penalty under Rule 173Q. In fact, assessee are seeking for setting aside of the entire order including the penalty imposed under Section 11AC. 3.1 On the other hand, Ld. A.R Shri B. Balamurugan submits that assessee had not been able to achieve the export obligation in terms of value of goods exported for the periods 1993-94 to 1997-98 and from 1998-99 2002-03. 3.3 Further, on expiry of the LOP, the assessee did not apply for debonding. Hence conditions imposed as per B-7 bond executed by them has not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst quantification of duty Tribunal had directed the Commissioner to consider the assessee's plea based on the terms of the relevant notifications. It was made clear by the Tribunal that dispute stands limited to quantification of duty and imposability of fine and penalty. Assessee, however, is aggrieved with the de novo adjudication and is once again before this forum. 5.2 This being so, the core issue that requires to be considered by us will again be limited to the correctness or otherwise of the quantification of duty and imposability of fine and penalty. 5.3 In terms of the LOP, the assessee have to achieve a minimum export obligation of NFEP of 40% for a period of 10 years. Only because this obligation was not achieved, the De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... para-23 of the impugned order where she has conceded that as per the Notification No.13/91-Cus. the customs duty is to be included on the depreciation value thereof. However, the adjudicating authority has not allowed depreciation on the grounds that the said facility can be extended only when the unit has been permitted provisional/final debonding by the Development Commissioner, but that in the present case assessee had not sought debonding even after cancellation of LOP. We are not able to agree with such a view. There have been innumerable decisions/judgments of higher appellate courts which have laid down that duty liability in such cases is required to be worked out on the depreciation value only. In our considered opinion, when the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Customs Act, 1962. However considering that travails faced by assessee, in particular, the fact that while having not fulfilled export obligation in toto, they have however achieved NFEP of 82.69% and 96.21% for the relevant periods, as also the fact that the dispute has resulted in protracted legal proceedings, we are of the considered opinion that the penalty should be reduced to Rs. 25,00,000/- (Rupees Twenty five lakhs only). So ordered. 5.10 Coming to the department's appeal, in view of discussions herein above, we are not able to find any merit in their prayers for confiscation of goods and imposition of further penalty under Rule 173Q, for which reason, Appeal C/242/2009 is dismissed. 5.11 Appeals are disposed of on above t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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