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TMI Blog2023 (10) TMI 735X X X X Extracts X X X X X X X X Extracts X X X X ..... ed order dated 22.12.2008 vide which the contentions raised in the show-cause notice were confirmed. Hence, this appeal. 2. Shri S.C. Jain, learned Advocate for the appellant, traces the sequence of events in the case and submits that the impugned order wrongly demands Customs duty at the rate applicable on the day of import rather than the rate of duty prevalent on the day of de-bonding i.e., 30.09.2008 in terms of Clause 5(a) of Notification No.53/97 and in terms of Section 15 of the Customs Act. He also submits that learned Commissioner has wrongly assumed that project export turnover of USD 51 Lakhs was the export obligation; moreover, the export obligation fulfilled by the appellant, of USD 48,595 has not been taken into consideration. He relies on the following: Kesoram Rayon- 1996 (66) ECR 201 (SC). SBEC Sugar Ltd.- 2011 (264) ELT 492 (SC). Circular No.31/97-Cus. Dated 14.08.1997. International Knitting Ltd.- 2012 (283) ELT 584 (Tri. Mumbai) Pittie Agro Ventures Ltd.- 2014 (314) ELT 471. Business Process Technologies (I) Pvt. Ltd.- 2010 (249) ELT 248 (Tri. Bang.). Trans Freight Containers Ltd.- 2012 (277) ELT 168 (Tri. Mumbai) Moonlight Exim (P) Ltd.- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to clear the capital goods by the Development Commissioner or the Board of Approval and as the goods have not been taken to any other place in India in accordance with Exim Policy, depreciated value cannot be considered. (v) The appellant has contravened the provisions of the Customs Notification No.53/19-Cus. dated 03.06.1997 and Notification No.01/95-CE dated 04.01.1995 and therefore, imposition of penalty is justified. 6. Heard both sides and perused the records of the case. Brief issues that require our consideration are that in the event of nonfulfillment of export obligation (i) what is the relevant date for application of rate of duty for demanding duty foregone in case of imports and domestic procurement by the EOU; (ii) whether duty is payable on the depreciated value and (iii) whether penalties can be imposed under Sections 112 and 114A of the Customs Act, 1962. The appellant submits that in terms of Clause 5(a) of Notification No.53/97-Cus. and Section 15 of the Customs Act, 1962, the rate of duty as applicable on the date of removal or de-bonding is payable on the capital goods. We find that it will be beneficial to have a look at the relevant provisions. Condition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e period of three months counted from the date of the order permitting warehousing if they are not such goods. The first proviso to sub-section (1) contemplates the reduction of the periods aforementioned, of one year and three months respectively (now referred to as "the permitted periods"), if the goods are likely to deteriorate. It also permits, if the goods are not likely to deteriorate, an extension of the permitted periods on sufficient cause being shown; the Collector of Customs can extend the permitted periods by six months and the Central Board of Excise and Customs can do so for as long as it deems fit. By reason of sub-section (2), interest is payable on the amount of duty on the warehoused goods for the period from the expiry of the permitted periods till the date of their clearance from the warehouse, regardless of whether the goods have remained in the warehouse beyond the permitted periods by reason of extension of such periods or otherwise. 11. Put briefly, so far as it is relevant for our purpose, warehousing is permissible for only a stated period; the period is extendible if cause for doing so is shown; and, whether or not the permissible period has been exten ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 15(1)(b). It did not deal with a situation where goods continued to remain in a bonded warehouse beyond the permitted period. It does not assist the appellants' case. 16. The permitted period for warehousing the said bales came to an end on 15th September, 1984, but the said bales remained in the bonded warehouse thereafter. The said bales, by reason of the provisions of Section 72, were deemed to have been improperly removed from the bonded warehouse on that day and subject to duty at the rate then in force. The demand notice dated 8th May, 1985, called upon the appellants to pay such duty. The order dated 25th June, 1985, pertaining to the appellants' private bonded warehouse, rightly made it clear that the said bales had not been cleared therefrom on an ex-bond bill of entry under Section 68 but under Section 72. While the appellants may have filed an ex-bond bill of entry pertaining to the said bales on 30th May, 1985, there is nothing on record that suggests that clearance thereon under Section 68 was ordered. Section 15(1)(b) has, therefore, no application. 17. The consequence of non-removal of warehoused goods within the permitted period or the permitted extension is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... they are not liable to pay any interest on the duty demanded inasmuch as the goods cease to be „warehoused goods' on the date of deemed removal and, therefore, the provisions of Section 61 would not apply. Section 61(2) provides that where any warehoused goods remained in a warehouse beyond the period specified in the subsection (1) by reasons of extension of the warehousing period or otherwise, interest at such rates as is specified in Section 47 shall be payable, on the amount of duty payable at the time of clearance of such goods in accordance with the provisions of Section 15, for the period from the expiry of the warehousing period till the date of payment of duty on the warehoused goods. As per Section 2(44) of the Customs Act, 1962 "warehoused goods" has been defined as goods deposited in a warehouse. A combined reading of both these provisions make it clear that the place where the goods are deposited should be a warehouse at the time of deposit of the goods. On the date of removal, it is not necessary that the place where the goods have been deposited remains a warehouse. Therefore, reading the provisions of Section 61 with Section 2(44) of the Customs Act, the goods ..... 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