2008 (2) TMI 163

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....d indigenously free of duty under the Scheme, both Customs and Central Excise Duty were foregone by the Revenue. The goods were imported under the 100% EOU Scheme. Therefore, the appellants were required to discharge the export obligation. As the appellants could not fulfill the export obligation under the scheme, they had violated the provisions of Foreign Trade Policy and also the Customs Act and the Notifications. Hence, Revenue proceeded against them. The Original Authority, in his adjudication order, confirmed the duty foregone to the tune of Rs. 7,61,40,370/- being the Customs Duty and also Rs. 74,441/- being the Central Excise duty on the indigenous goods procured under the relevant statutory provisions. Further, he imposed a penalty....

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.....) 4.1. The learned advocate submitted that due to change in technology, there was sudden slump in the demand of the product manufactured by the appellant and, therefore, they lost their export market. Hence, they were not in a position to fulfill the export obligation. He stated that the recovery of interest in terms of Section 72 of the Customs Act read with exemption Notification under the impugned order is not sustainable. During the material period, the Notification Nos. 13/81-Cus dated 09.02.1981 and 53/97-Cus dated 03.06.1997 did not contain any provision for demanding interest. On this aspect, the learned Advocate relied on the following case-laws:- (i) CC vs. Stelfast Pvt. Ltd. - 2007 (207) ELT 46 (Kar.) (ii) F....

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....g decisions, which hold that in such circumstances, no penalty can be imposed and interest demanded. (i) Taurus Novelties Ltd. vs. CC, Bangalore - 2004 (173) ELT 100 (Tri.-Bang.) (ii) Meirs Pharma (India) Pvt. Ltd. vs. CC, Chennai - 2004 (167) ELT 53 (Tri.-Chennai) (iii) Suvarna Aqua Farm & Exports Ltd. vs. CC, Guntur - 2005 (190) ELT 284 (Tri.-Bang.) 5. The learned SDR pointed out that the appellant failed to fulfill the conditions of Notification and, therefore, they are liable to pay the duty demanded and the impugned orders are legal and proper. Hence, she requested the Tribunal to uphold the impugned order. 6. On a very careful consideration of the issue, we find that even though the appellants have not....