2009 (8) TMI 1064

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.... (iii)   Penalty of Rs. 3,36,47,544/- under Section 11AC of the Central Excise Act, 1944 read with Rule 25 and 26 of Central Excise Rules, 2002. (iv)   Penalty of Rs. 57,43,602/- under Section 114A of the Customs Act, 1962. 2. The case of the Revenue is that the appellants, an exporter of software and an STPI unit assembled Mobile Tracking Devices (MTDs) using inputs and capital goods imported under the E.O.U scheme. Demand is towards duty found due on such MTDs cleared by the E.O.U in terms of proviso to Section 3(1) of the Central Excise Act, 1944 (the Act), duty found payable on certain components diverted and inadmissible Cenvat credit availed by the E.O.U. MAIPL had got manufactured MTDs, supplying the PCBs ....

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.... and, capital goods such as testing equipments found to have been used in the production of MTDs. We find from the records that the appellants had substantiated their claim that the PCBs found to have been consumed in the manufacture of MTDs were imported on payment of duty with details of Bills of Entry and the particulars of customs duty paid. We find that the Commissioner has not given a clear finding as to how this submission of the appellants deserved to be rejected. The Commissioner was required to give a categorical finding in this regard as this aspect is crucial to the charge found against the appellants. He has rejected this submission on a finding that the appellants had failed to correlate the inputs with the MTDs. We find that ....

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....ee demands. There is also a demand of customs duty of Rs 39,16,375/- (Rupees Thirty nine lakhs sixteen thousand three hundred and seventy five only) along with applicable interest on inputs such as GSM/GPS modules and antennae, ICs, capacitors, resistors, connectors etc. improperly removed outside E.O.U. premises. We have found prima facie that the PCBs had been imported on payment of duty. Capital goods both imported and indigenous used for production of MTDs are still available with the appellants in their bonded premises. Therefore, exemption availed on their procurement under the E.O.U. scheme cannot be validly demanded and recovered at this stage. The Commissioner of Customs has prima facie no jurisdiction over units outside the E.O.U.....