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TMI Blog2009 (1) TMI 267X X X X Extracts X X X X X X X X Extracts X X X X ..... facts and law involved. In view of this, we are passing a common order. All the impugned orders have been passed by the Commissioner of Customs, Bangalore. The details of the appeals are given below :- Sl. No. Appeal No. Name of the Party Impugned Order No. Date Amount involved 1. C/07/2008 M/s. Hewlett Packard India Sales (P) Ltd. v. CC, Bangalore OIO No. 28/2007 dt. 28-9-2007/16-10-2007 Duty:Rs. 46,55,639/-RF: Rs. 30,00,000/-Penalty:Rs. 5,00,000/-u/s 112(a)(ii)of Customs Act. 2. C/320/2008 M/s. Wipro GE Healthcare Private Ltd. v. CC, Bangalore OIO No. 02/2008 dt: 22/25-2-2008 Duty:Rs. 2,07,58,187/-Redemption fine:Rs. 1,20,00,000/-Penalties:(a) Rs. 30,00,000/-u/s 112(a) of the Customs Act;(b) Rs. 1,00,000/-under Rule 25 of the CE Rules. 3. C/405/2008 Shri Srikanth B. Navale, Tax Manager, Wipro GE Healthcare Private Ltd. v. CC, Bangalore -do- Penalties:(i) Rs. 2,00,000/-u/s 112(a) of the Customs Act.(b) Rs. 20,000/- as per Rule 25 of the CE Rules. 4. C/347/2008 M/s. GE Medical System India Pvt. Ltd. v. CC, Bangalore OI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, they ought to have made declaration in respect of such export etc. In view of this, the Commissioner has demanded full duty on these parts, which have been imported and later exported. The Show Cause Notice has been issued under Section 111(o) of the Customs Act, which is for non-fulfilment of the post-export conditions of the relevant Customs Notification. On this ground, it has been held that the impugned goods are liable for confiscation. They have been confiscated under Section 111(o) of the Customs Act and redemption fines have been imposed and penalties also have been imposed as mentioned in the above tabular column. This is strongly resisted by the learned advocate. 3.2 It has been stated by the learned Advocate that in respect of all these items, the goods have been imported only with the permission of the Competent Authority. They have been properly accounted for and along with the main equipment, it has been stated that in certain cases, the components, for example, in the case of Computers, the monitors are required and certain other accessories are required. Even though some of the accessories and spares are imported, they are opened in terms of the Standard Operat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tived the contention of the Department. Reliance was placed on the following decisions :- (i) Baccorose Perfumes Beauty Products Ltd. v. CCE, Kandla - 2006 (194) E.L.T. 310 (Tri.-Mumbai) (ii) Winsome Yarns Limited v. CCE, Chandigarh - 2004 (172) E.L.T. 286 (Tri.-Del.) (iii) Oracle Infotech (P) Ltd. v. CCE, New Delhi - 2003 (151) E.L.T. 656 (Tri.-Del.) 3.4 It was urged that as long as the appellants can establish that the goods exported by them were subjected to a process of testing or labelling or re-labelling, packing/re-packing, as the case may be, which are recognized as process of manufacture under the provisions of the Policy, the Customs Department cannot deny the benefit of the exemption to the imports made by the appellants. 3.5 It was further urged that the Commissioner had erroneously assumed that the appellants have availed the benefit of exemption to the parts under para 10/10A of the Notification No. 52/2003-Cus., dated 31-3-2003 and Notification No. 22/2003-C.E., dated 31-3-2003. It was submitted that a close reading of para 10 of the Notification 52/2003 reveals that an importer, claiming the benefit of exemption, is required to declare at the time of imp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d both the conditions of Notifications in question and the finding by the Commissioner that the duty free goods have not been put to specified use is not correct. It was stated that the total exports on which duty is now demanded works out to about 1% of the total FOB value of exports made by the appellants in the case of GE Medical Systems and Wipro GE Healthcare and it is also less than 1% in the case of the other appellant. It was stated that there is no revenue loss as drawback is admissible on goods exported 'as such'. It was stated that even assuming that there is no manufacture and if the contention of the Department is correct, that the goods have been exported 'as such', then the appellants would be entitled for the benefit of drawback under Section 74 of the Customs Act wherein they would get the drawback at 98%, as the parts have been exported. In the case of locally procured parts, they would be entitled for the rebate of duty under Rule 18 of the Central Excise Rules. Our attention was invited to the decision of the Tribunal in the case of CCE, Bangalore v. BPL Sanyo Utilities Appliances - 2004 (177) E.L.T. 722 (Tri.-Bang.) and in the case of Gopal Zarda Udyog v. CCE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eceipt, storage and utilization of the goods; (c) To dispose of the manufactured goods and the waste and scrap in accordance with the Foreign Trade Policy and the Notification. 3.9 It was submitted that there is no dispute that the imported duty free peripherals have been brought into their EHTP unit and used for export production, after due accountal. The goods have, thereafter been exported out of the country and the foreign exchange has also been duly realised. In these circumstances, the appellants have fulfilled all the conditions precedent for discharge of the bond executed by them. Consequently, the bond executed by them for duty free imports under Notification 52/2003 cannot be enforced. Since they had fulfilled the conditions of Notification 52/2003, it was argued that demand could not have been issued under Section 111(o) of the Customs Act. In fact, demand ought to have been invoked under Section 28 of the Customs Act only. In respect of Section 28 also, the demand could not have been issued, as the date of issue of the Show Cause Notice is much beyond the normal period and there are no circumstances for invocation of the longer period. There are no circumstances als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Excise Notification inasmuch as the goods were not used in the manufacture of goods to be exported, they would be violating the said conditions and the impugned goods would be liable for confiscation under Section 111(o) of the Customs Act. Consequently, he has imposed redemption fine and also penalties apart from demanding the full duty on the goods. While looking into the facts of the case, it is not that these appellants have engaged simply in trading of the goods. The details of the imports and exports have been given. The percentage of the items exported 'as such' is not at all very high. For example, in respect of Hewlett Packard, in 2003-2004, the CIF value of total import made is 89.63 crores and the CIF value of the items alleged to be exported 'as such' is only 0.43 crores. It amounts to 0.47%. In the year 2004-2005, the CIF value of total imports is 76.44 crores and the CIF value of the items alleged to be exported 'as such' in the Show Cause Notice is only 1.15 crores. The percentage is 1.50. Thus, it was submitted that a very small percentage of the imported goods have been exported according to the Department also as such. Such activity of exporting the goods is an ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g, there is no violation of Notification 52/2003-Cus., dated 31-3-2003. Therefore, in our view, the goods cannot be held to be confiscable under Section 111(o) of the Customs Act. In that case, they could not have been imposed with redemption fine. Moreover, if 111(o) is not invoked, then the Show Cause Notice ought to have been issued under Section 28 invoking a longer period. We clearly find that the ingredients for invoking the longer period or the grounds for invoking the longer period in terms of Section 28 of the Customs Act is not available to the Revenue. Hence, in that case, the demands would also be time-barred. 5.1 Another point to be noticed is that the entire issue involves the question of interpretation of Notification 52/2003 and what is considered to be 'manufacture' in terms of the EXIM Policy for a 100% EOU. This, definitely, is a question of interpretation and the Commissioner, in terms of the Board's Circular, ought to have made a reference to the Board before issuing the Show Cause Notice. In view of all these factors, we are of the view that the demand cannot be sustained and there is no justification for holding the goods to be confiscable. In these circums ..... X X X X Extracts X X X X X X X X Extracts X X X X
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