2020 (3) TMI 272 - AT - Customs

Appellant liable for duty rate at debonding, exempt from interest under Notification No. 132/2004-Cus (NT).

Sahuwala High Pressure Versus Commissioner of Customs, and Service Tax Visakhapatnam– Cus

The Tribunal held that the appellant is liable to pay duty at the rate prevailing at the time of debonding for both imported and indigenously procured ... 100% EOU - export of any finished goods not made, thereby failed to achieve positive Net Foreign Earnings (NFE) - debonding of unit - Advance DTA Sale - benefit of N/N. 52/2003-CUS dated 31.03.2003 - on which date duty is payable by the appellant and at what rate? Whether appellant is liable to pay duty from the date of demanding of their unit on the rate of duty prevailing on such date or at the rate of duty prevailing at the time of import? - HELD THAT:- As per Section 15 (1)(b) of the act, the duty is payable at the time when goods were actually removed from warehouse under Section 68 of the Act. Admittedly, in the case in hand, the appellant is a 100% EOU and having letter of permission to work as 100% EOU. As the appellant could not achieve positive NEP, the appellant applied for demanding and at the time of demanding filed bills of entry which are not in dispute. Therefore, in terms of Section 15 of the Act, the appellant is liable to pay duty at the rate prevailing at the time of debonding. This is also in consonance of Clause 8(3A)/ 8(4A) of the notification which provides that the appellant/ assessee is liable to pay duty at the rate in force on the date of debonding if unit failed to achieve said positive NFP. Therefore, with regard to the demand of duty of ₹ 74,09,538/-, the appellant is liable to pay duty at the rate of duty prevailing at the time of debonding of the unit. Indigenously procured capital goods in terms of Notification No. 22/2003-CE dated 31.03.2003 - HELD THAT:- The clause 8(i) of the notification clearly specifies that the duty is payable at the rate in force on the date of debonding. As per the said notification, the appellant is liable to pay duty at the rate in force on the date of debonding. Therefore, with regard to the demand of differential duty of ₹ 21,03,122/-, we hold that appellant is liable to pay duty at the rate of prevailing on the date of debonding. The duty is to be calculated accordingly. Whether the appellant is liable to pay interest for the intervening period or not? - HELD THAT:- In terms of Notification No. 132/2004-Cus (NT) dated 25.11.2004 the appellant are not liable to pay interest as held by this Tribunal in the case of BUSINESS PROCESS TECHNOLOGIES (I) PVT. LTD. VERSUS COMMR. OF CUS., BANGALORE [2009 (9) TMI 351 - CESTAT, BANGALORE] where in this Tribunal held that the Central Govt. has exempted the interest accrued on the customs duty payable by an export oriented unit. We also find that provisions of Section 61 clearly exclude the liability to pay interest for a period of 5 years from the date of bonding. Thus, for imported capital goods, the appellant is liable to pay duty at the rate of duty prevailing on the date of debonding - the appellant is liable to pay duty for indigenously procured capital goods at the rate of duty prevailing on the date of debonding - no interest is payable by the appellant. Appeal disposed off. Issues Involved:1. Whether the appellant is liable to pay duty from the date of debonding of their unit at the rate of duty prevailing on such date or at the rate of duty prevailing at the time of import.2. Whether the appellant is liable to pay interest for the intervening period.Detailed Analysis:Issue No. 1: Duty Liability Date and RateArguments and Legal Provisions:- The appellant contended that the duty should be payable at the rate prevailing on the date of debonding, as per Notification No. 52/2003-Cus dated 31.03.2003 and Notification No. 22/2003-CE dated 31.03.2003.- The respondent argued that the appellant should pay duty from the date of import, in accordance with Clause 3(d)(I) of Notification No. 52/2003-Cus.Judgment:- The Tribunal examined Notification No. 52/2003-Cus and Notification No. 22/2003-CE, along with Section 15 of the Customs Act, 1962.- It was concluded that, as per Section 15(1)(b) of the Customs Act, the duty is payable at the time when goods are actually removed from the warehouse.- The Tribunal held that the appellant is liable to pay duty at the rate prevailing at the time of debonding, as this aligns with Clause 8(3A)/8(4A) of the notification.- For imported raw materials, the duty should be calculated at the rate prevailing on the date of debonding.- For indigenously procured capital goods, the duty should also be calculated at the rate prevailing on the date of debonding.Issue No. 2: Interest LiabilityArguments and Legal Provisions:- The appellant argued that no interest is payable as per Notification No. 132/2004-Cus (NT) dated 25.11.2004.- The respondent maintained that interest is correctly demanded as per the terms of the notification.Judgment:- The Tribunal referred to the precedent set in Business Process Technologies India Pvt Ltd., which held that an export-oriented unit is not liable to pay interest for the period during which the capital goods were warehoused.- Notification No. 132/2004-Cus (NT) exempts interest accrued on customs duties payable on capital goods warehoused under Chapter IX of the Customs Act.- The Tribunal concluded that the appellant is not liable to pay interest.Final Order:1. For imported capital goods, the appellant is liable to pay duty at the rate prevailing on the date of debonding.2. For indigenously procured capital goods, the appellant is liable to pay duty at the rate prevailing on the date of debonding.3. No interest is payable by the appellant.The Revenue is directed to calculate the duty at the rate prevailing on the date of debonding. Any amount payable by the appellant should be paid within one month. The appeal is disposed of in these terms.