TaxTMI 
TaxTMI 
2014 (1) TMI 1393
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....tle with their creditors. After hearing both the sides we found that this matter involves more than Rs. 1 crore demand and quite old and hence the application for early hearing was allowed. Since it was found that the matter was a narrow campus both the parties were heard for disposal of merits. 2. The respondent was granted green card to set up an 100% EOU and undertook operations. They imported capital goods and raw materials and started operation. The total export obligation cast on them was Rs.1143.85 lakhs. After operation of a few months they were able to discharge obligation to the extent of Rs.143.85 lakhs and they were not able to continue their operations. Since the respondent was not able to comply with the terms of the EOU sc....
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....r the original demand letter dated 11-11-03 issued for the reason that warehousing period has expired is legally maintainable? (ii) Whether the order dated 11-11-03 has reached finality. On These issues he gave finding and order as follows:- Regarding (I) above: The very basis for demand of duty vide confirmation of demand notice F.No. S4/624/94-bonds dated 11.11.2003 is non-renewal of warehousing period as highlighted in the impugned letter. The demand dated 23.7.2003 that was confirmed by the order dated 11.11.2003 read as follows:- With reference to the bonded goods now lying in M/s. Century Woods Ltd. warehousi....
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....n that the bonded goods lying in the warehouse as on 23.7.2003 were beyond the expiry of the validity period when in actuality the warehousing period has been extended upto 8.9.2005 on 2.2.2001 itself i.e. more than nearly 2 and half years before the date of demand. This stance was not in consonance with the facts as discussed above. The order too stated that 'there is no provision under Customs Act, 1962' to extend the validity of the time expired bonds and therefore the demand issued already is confirmed. An erroneous and faulty demand can only result in an erroneous and faulty order. Thus, the demand itself is ab initio void and thus there can be no question of the resultant order attaining finality. Further, there was no informati....
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....e export obligation. 4. We have heard the learned counsel for the respondent. The respondent submits that they are not running away from duty liability and they are willing to discharge the duty liability as per the bond executed. The dispute is only about the quantification of demand by permitting depreciation for the machinery as per law. Further, he argues that the warehousing sanction expired only on 8.9.2005 and a demand issued prior to that date is bad in law and cannot be enforced. He also submits that interest will apply only from the date of expiry of the warehousing period. The learned counsel submits that the Department started the recovery action before the expiry of ten years period given to an 100% EOU which was from 1995 a....