2006 (1) TMI 338

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....ain export obligations as decided by the Department of Industrial Development. The appellants could not fulfil the export obligations in absolute terms. However, they achieved 64% of the NFEP for the period from 1-3-92 to 31-3-2001. The Development Commissioner, Cochin Special Economic Zone initiated penal action against the appellants and imposed a penalty of Rs. 10,000/-. The Dy. Commissioner of Customs proceeded against the appellants for non-fulfilment of export obligation. She demanded Customs Duty of Rs. 1,83,17,264/- on the goods imported by the appellants in terms of Notifications 13/81 and 53/97 read with Sections 28 and 72 of the Customs Act, 1962. Further, she confirmed Central Excise duty of Rs. 98,95,350/- under Notification No....

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....Infosys Technologies Ltd. reported in 2003 (159) E.L.T. 863 (T-Bang.) wherein it has been held that the goods deposited in the warehouse can be charged to duty only on expiry of bond period. Before the said expiry, the demand would be premature. Hence, the learned Advocate urged that the demand of duty on capital goods is not sustainable at this stage, when the goods are in the bonded warehouse of 100% EOU. As regards raw materials, consumables, etc., he said that the appellants are liable to duty to the extent of non-utilized quantity. 4. The learned SDR reiterated the findings of the lower authorities. 5. We have gone through the records of the case carefully. Both the lower authorities have extracted the following paragra....

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....ed goods in terms of the relevant Notification is not at all correct. The view taken by lower authority is not in consonance with justice and fair play. The fact that the EOU has been allowed to de-bond is not in dispute. We are in agreement with the contention of the appellants that the demand of duty on capital goods at this stage is rather premature. The 100% EOU is a bonded warehouse in terms in the scheme of 100% EOU and also the Customs Act. It is well settled that duty has to be paid on warehouse goods only at the time of clearance from the warehouse. The lower authorities view that duty is payable even when the goods are in the bonded warehouse is not as per law. As regards goods other than capital goods (raw materials, consumables,....