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TMI Blog2003 (6) TMI 89X X X X Extracts X X X X X X X X Extracts X X X X ..... appellants within the six months, the confiscation of the goods is not legal and proper and so also the demand of redemption fine. We, therefore, set aside the order of confiscation of the goods and demand of redemption fine. Whether duty of Rs. 3,05,11,954 with interest @ 24% from the date of import is demandable or not and whether imposition of penalty is warranted or not - In the present case the Notification involved is 169/90-Cus. dated 3-5-90. We have gone through the Notification and we find that there is no stipulation in the Notification in regard to payment of interest along with duty. Para (b) (ii) of the said Notification prescribes that the importer shall make declaration before the Assistant Commissioner binding himself to pay on demand an amount equal to the duty leviable on such capital goods but for the exemption contained therein. Therefore, in the absence of any provision in the Notification regarding recovery of interest, the Revenue authorities cannot demand interest. Thus, we set aside the order of demand of interest. In view of the fact that we have set aside the order of confiscation of the goods imported, we hold that there is no warrant for imposition of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 383, dated 31-7-92 by the appellants herein and it was revealed that the importer had not fulfilled the export obligation within the prescribed period as stipulated in the licence. The following capital goods were imported against licence No. EPCG/P/CG/2129184, dated 27-1-92 and were supplied by M/s. Corning Incoporated USA : (1) Forehearth Super Structure Refractories (2) Forehearth firing system with control (3) Forehearth Thermocouple Hardware (4) Wind Cooling system with control (5) Stirrers (6) Stirrers drives etc. These goods were cleared vide Bill of Entry Nos. (a) 3506/20-4-92 (b) 4003, dated 11-5-92. The total value of the capital goods imported against the said licence works out to Rs. 8,88,90,507/-. The importer vide other import licence cited above has imported automatic bulb blowing machine valued at Rs. 96,12,006/- vide Bill of entry No. 1032/12-3-92. The appellants-importer had claimed the benefit of Notification No. 169/90, dated 3-5-90 and paid the concessional rate of duty at the rate of 15% ad valorem. In terms of the EPCG licence they were permitted to import capital goods worth Rs. 9,75,69,227/- with a condition that they fulfil the export obligati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est cannot be demanded. He therefore submitted that demand of interest is not legal and proper and is required to be set aside. He has also referred to Notification No. 169/90, dated 3-5-90 and 160/92, dated 20-4-92 which have been issued granting exemption from duty in respect of capital goods imported by specified importer under the Export & Import Policy and submitted that none of these notifications stipulate anything regarding payment of interest. He has also referred to para 10(i), (ii) and (iii) of the show cause notice wherein the show cause notice referred to Notification No. 169/90. He has also referred to the proceedings before the Board for Industrial and Financial Reconstruction under which the company has been declared as a Sick Unit. He has particularly referred to para 7 wherein, the Board has ordered that the company shall not alienate any of its assets in terms of Section 22 of the Act. He has also invited our attention to the judgment rendered by the Hon'ble Apex Court in the case of Tata Davy Ltd. v. State of Orissa, and Others reported in (1977) 6 SCC 669 wherein the Supreme Court had occasion to interpret the words "any other law" occurring in Se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ghting bulbs. In terms of the licences, capital goods were imported availing the exemption under Customs Notification No. 169/90, dated 3-5-90 and 160/92 as applicable to EPCG Scheme which cast an obligation on the appellants to export goods and accordingly they had executed bonds with the Bank Guarantees binding themselves to pay the differential duty on demand in case of non-fulfilment of export obligations. The appellants utterly failed to fulfil the export obligations cast on them within a period of five years from the date of first import and in fact they could only export 1.1% of the export obligation cast on them and they have expressed their inability to fulfil the export obligations. The reasons put forward by them was lack of working capital as the Banks have not provided the amount required for the purpose. As a result, proceedings were drawn by the BIFR for declaring the unit as a Sick Unit and the unit was declared as Sick by the proceedings of the hearing held on 19-2-1997 and a copy of the proceedings has been filed in the paper book. We observe that here is a case where the appellants have come out truthfully as to how they were disabled from fulfilling the export o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... goods back, the question of its confiscation does not arise. In view of the fact that in the instant case, admittedly, the show cause notice has not been served on the appellants within the six months, the confiscation of the goods is not legal and proper and so also the demand of redemption fine. We, therefore, set aside the order of confiscation of the goods and demand of redemption fine. (ii) Whether duty of Rs. 3,05,11,954 with interest @ 24% from the date of import is demandable or not and whether imposition of penalty is warranted or not. We observe that there is no dispute that the appellants have failed to fulfil the export obligations cast on them in terms of the licences granted to them read with Notification No. 169/90. In view of this, duty is demandable from the appellants and we uphold the demand of duty. So far as demand of interest is concerned, we observe that similar case came up for consideration before this Tribunal in the case of FAL Industries v. CC, Chennai, reported in 2003 (106) E.L.T. 291 wherein it was held that while duty is demandable, interest is not demandable. Confiscation of the goods and imposition of penalty was also set aside by the Tribunal. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Tata Davy Ltd. v. State of Orissa, reported in (1997) 6 SCC 669 wherein the Hon'ble Apex Court had occasion to interpret the words "any other law" occurring in Section 22(1) of the SICA, 1985 and the Apex Court has held that the term "any other law" covers even laws made under the State List and hence without the Board's consent arrears of sales tax under a State Act could not be recovered from the sick company during the continuance of the implementation of the scheme. They have, therefore, pleaded that order of confiscation of the capital goods of the sick unit and any coercive recovery action has to be held in abeyance by the Commissioner without the consent of the BIFR. We have gone through the judgment of the Hon'ble Apex Court and we note that in the cited case what the Apex Court had held was that the Respondents in that case (State of Orissa) cannot recover the arrears of sales tax from the assessee without first seeking the consent of the Board in that behalf. In the instant case, the Commissioner of Customs has proceeded against appellants herein under the Provisions of the Customs Act, because of the breach of specific conditions as sti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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