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TMI Blog2018 (10) TMI 8X X X X Extracts X X X X X X X X Extracts X X X X ..... atter required to go back to the original authority. Appeal allowed by way of remand. - C/781/2008-DB; E/893/2008 - Final Order No.21119-21120/2018 - Dated:- 7-8-2018 - MR. S.S GARG, JUDICIAL MEMBER And MR. P. ANJANI KUMAR, TECHNICAL MEMBER Shri G. Shivadass, Advocate, Ms. Apoorva, Advocate, Shri Syed Peeran, Advocate For the Appellant Dr. J. Harish, Dy. Commissioner(AR) For the Respondent ORDER Per: P. ANJANI KUMAR The appellants, M/s. Patil Atlantic Force Sunum Ltd., are 100% EOU in terms of the Letter of Permission dt. 20/07/1988. The appellants have imported capital goods under Notification No.13/81-Cus. and Notification No.123/81-CE respectively. They have commenced commercial production in 1991 and up to 1998, they have exported the goods worth ₹ 2,08 crores. In March, 1998, the unit was declared defunct and was closed. The Development Commissioner of Customs passed a Order-in-Original dt. 26/11/2002 suo moto debonding the premises and a show-cause notice dt. 22/11/2007 was issued demanding customs duty of ₹ 2,37,18,242/- and central excise duty of ₹ 5,35,992/- and central excise duty of R.7,895/-. Commissioner of Customs Vide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ables imported by the EOU in case of failure to either fulfill the export obligation or to achieve NFEP as the case may be. The Notification did not provide for demand of duty on capital goods imported duty free in case the unit failed to fulfill its obligation. The above Notification was in force till 1997. Notification No.53/97 has come into force which was amended in 2003 whereby the provision to demand customs duty on capital goods was contemplated where the export obligation was not fulfilled. The imports in the instant case, having been made prior to these amendments, the amendments would not be applicable. During the period, neither the provisions of EXIM Policy nor Customs Act, 1962 or Notifications contemplated the question of payment of entire duty foregone at the time of import of the capital goods imported duty free in case failure to achieve NFE. 2.5. They also contended that in the instant case, the import of capital goods was made in the year 1987. The appellants started commercial production on 26/07/1991. The appellants would be entitled to pay duty on depreciated value which is required to be calculated at the rate specified in the Policy / Notification. CBECC ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. [2006(193) ELT 341] Affirmed by Hon ble High court of Karnataka [2007(217) ELT 176 (Kar.)] b. J.K. Cement Works Vs. CCE C, Jaipur [2008(223) ELT 138 (Raj.) 2.8. Lastly, they have also contended that confiscation of goods and imposition of penalty is not sustainable in view of the following case laws:- a. Jaswal neco Ltd. Vs. CC, Visahakapatnam [2015(322) ELT 561 (SC)] b. Suvarna Aqua Farm Exports Ltd. Vs. CC [2005(190) ELT 284] c. Natural Stone Exports Ltd. Vs. CC [2006(198) ELT 440] 3. The Department representative has reiterated the findings of the Order-in-Original and submitted that Tribunal in the case of German Garden Ltd. Vs. CCE, Delhi-III [2015(328) ELT 505 (Tri. Del.)] has held that Notifications No.126/94-Cus and No.136/94-CE neither provided to achieve positive NFEE nor any condition requiring payment of proportionate duty in case of non-fulfillment of export obligation. Therefore entire duty foregone which should be recoverable. As the conditions of the exemption notification have not been fulfilled, demand is sustainable. The Tribunal has observed as follows:- 7. The appellants referred to the judgment of Khabros Steel India Ltd. v. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd for such sum as may be prescribed by the Assistant Commissioner of Customs or Deputy Commissioner of Customs binding himself :- (a) to produce a certificate from the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise having jurisdiction over his unit, certifying receipt of the said goods in the unit as having been entered in the records prescribed for this purpose. (b) to fulfil the Export obligation and comply with the conditions stipulated in this notification and Export and Import Policy, and to pay on demand an amount equal to the duty leviable on the goods and interest at the rate of 20% per annum on the said duty from the date of duty free importation or procurement of the said goods till the date of payment of such duty. As per the LOP, the appellants had inter alia the following export obligation : (i) The entire (100% production shall be exported to General Currency Area Countries/Hard Currency Area Countries. (ii) To export the entire production (100%) excluding rejects not exceeding 5 (five) per cent. for a period of 10 (ten) years. (iii) The value addition shall be a minimum of 90% as per new formula ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the ratio of the decision in the case of CCE, Pune Vs. Semco Electric Pvt. Ltd. [2007(215) ELT 253 (Tri. Mum.)]. To have a better appreciation of the position, one has to see the notifications together. On going through the notifications, it is very clear that the condition in respect of capital goods was only with respect to the installation as has been held by this Bench in the case of Hindustan Agrigenetics ltd. (supra). Moreover, the decision of this Bench has been affirmed by the High Court of Andhra Pradesh. A doubt has been raised whether the decision of High Court, which has no jurisdiction on this Bench, needs to be followed or otherwise. It is seen that the judgment of Delhi Bench of the Tribunal in the case of German Garden Ltd. came in 2015 and it has not been shown to have been affirmed by any High Court. The decision of this Bench on the other hand has been affirmed by High Court . as there are no contra judgments by any of the High Courts in this matter, we find that the affirmation given by the Hon ble High Court of Andhra Pradesh requires to be followed. There, we follow the ratio of the decision of this Bench in the case of Hindustan Agrigenetics Ltd. (supra). ..... X X X X Extracts X X X X X X X X Extracts X X X X
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