2001 (10) TMI 404

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....into a contract between M/s. V.S. Dempo & Co. Ltd. for the purpose of construction and delivery of one No. 2000 DWT Iron Ore Barge to the buyer. The barge was constructed and delivered to M/s. V.S. Dempo & Co. Ltd. under a Bill of Entry declaring Rs. 2,67,36,861/- as the assessable value under Section 14 of the Customs Act, 1962 and cleared without payment of duty claiming exemption under Customs Notification No. 11/97, dt. 1-3-97. The barge was manufactured in the Customs bonded warehouse in accordance with the procedures laid down under Chapter IX of the Customs Act, 1962 read with the Manufacture of Other Operations in Warehouse Regulations, 1966. The Department was of the view that the provisions of the Central Excise Act, had been evad....

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....ehousing Station under Section 9 of the Customs Act, by letter dt. 21-9-1995. The Chief Commissioner of Customs, Mumbai had issued Notification No. 3/95-Cus. (N.T.) declaring Village Bainguinim, Goa as a Warehousing Station under Section 9 of the Customs Act. Warehousing Licence under Section 58 of the Customs Act, for storage of imported raw materials/components was issued on 27-5-1996 and permission to carry out manufacturing operations in bond under Section 65 of the Customs Act read with Clause 5 of Warehouse Regulations was also granted. The appellants presented Bill of Entry on 1-3-97 seeking clearance of the barge for home consumption. The barge was thus de-bonded for home consumption after being charged with duty of Customs and addi....

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.... of Customs, Ahmedabad [2000 (125) E.L.T. 1001 (Tribunal)] in which it has been held that manufacture of goods under Customs Warehousing bond would amount to treating the goods as having been manufactured in a foreign country. The Bench has considered the relevant provisions of the Customs Act including under Section 68 & 69 of the Act. It is the contention of the DR on the other hand that since the barge was manufactured in Central Excise Premises and since the appellants are registered with the Central Excise Department, the Central Excise duty is required to be levied. We however are not able to bring ourselves to agree with this contention of the Revenue. There is no dispute that the goods were manufactured in Customs Bonded warehouse t....

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....e said barge, "Jay Ashwini" is manufactured indigenously in bond where in the imported warehoused raw material/components etc. along with the indigenous raw material are used for the manufacture of final product. Hence Central Excise duty is required to be paid on the manufactured goods even if the goods are manufactured in a Customs bonded warehouse when the goods are cleared for home consumption unless specifically exempted." 5. The provisions of Section 65 of the Act permit manufacture of goods out of the components earlier warehoused. Any difficulty arising out of the various levels of duty attracted by imported components and by the final goods manufactured is also settled by virtue of the provisions of Section 66. Section 68 a....