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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 ..... n placed under seizure on 29.08.2006. It is also not the case that assessee had siphoned off capital goods etc. and that they were not found as on the date of seizure - for the purposes of determining the duty liability in respect of both imported and indigenously procured goods, depreciation for the period from their import/procurement, upto the date of cancellation of the LOP and the duty liability should be calculated accordingly. The matter is therefore once again remanded to the adjudicating authority, however only for the limited purpose of requantifying the duty liability - matter on remand. Penalty u/s 112 (ii) of Customs Act, 1962 - Held that: - 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, the penalty should be reduced to ₹ 25,00,000/-. Confiscation and penalty upheld - appeal allowed - decided partly in favor of appellant. - Appeal Nos. C/240/2009 & E/611/2009, Appeal No. C/242/2009 - Final Order No. 42090-42092/2017 - Da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,22,148/- in respect of indigenous capital goods and consumable tools/spares procured by the assessee along with interest liability. Adjudicating authority imposed a penalty of ₹ 90,00,000/- under Section 112 (ii) of Customs Act, 1962. Aggrieved by the order, the assessee has once again come to this forum 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 that duty payment has no nexus to export obligation, which is fixed under Foreign Trade Policy and the FTDT Act, which has separate pena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orted by the appellant and duty liability of ₹ 8,22,148/-in respect of indigenous capital goods and consumable tools/spares is very much in order. 3.5 In respect of departmental appeal C/242/2009, ld. A.R reiterates the grounds of appeal. In particular, he submits that SCN had proposed confiscation of detained goods under Section 111 (o) of the Customs Act and imposition of penalty under Section 112 of Customs Act and penalty under Rule 173Q of Central Excise Rules, 1944. However, the Commissioner has not made any observation in respect of confiscation of the goods. So also, when adjudicating authority confirmed the duty demanded in Rule 196 of Central Excise Rules, she should have imposed penalty under provisions of Rule 173Q of CER. Department is aggrieved by the non-confiscation of the subject goods under Section 111 (o) of Customs Act and non-imposition of penalty under rule 173Q of the Rules. 4. Heard both sides and have gone through the facts of the case. 5.1 We find that the matter has come up before this forum for the second time. On the earlier occasion, the Tribunal vide Final Order No.610/2008 dt. 24.06.2008 had remanded the matter with directions to suppl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 capital goods, tools etc. have been obtained and used by the assessee right from 1988, till permanent closure of the factory in July 2002, and, subsequent cancellation of LOP on 02.09.2005, it would be unjust and unfair to deny depreciation for the period of four years exposure to natural elements as also for wear and tear that would have resulted due to their extensive use. It is also noted that machinery available in the factory premises had been placed under seizure on 29.08.2006. It is also not the case that as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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