TaxTMI 
TaxTMI 
2016 (9) TMI 1163
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....are registered as a 100% EOU duly approved by the Ministry of Industry, Department of Industrial Development, New Delhi for production and export of shrimp and processed shrimp. The LOP was issued to them on 31-11-1992. Based on the permission granted, the assessee obtained a private bonded warehouse license during February, 1993 by executing necessary bond. 2.2 They imported various materials by availing exemption from payment of import duty in terms of Notification 13/81-Customs and subsequent notification issued in this behalf. The assessee also procured indigenous goods by availing excise duty exemption in terms of Notification 123/81-central Excise dated 02-06-1981 and subsequent notifications issued thereof. 2.3 The assessee sta....
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....d capital goods and allowed redemption of the same on payment of fine of Rs. 1,00,000/-. He further confiscated the indigenous capital goods but allowed them to be redeemed on payment of fine of Rs. 1,00,000/- and imposed a penalty of Rs. 5,00,000/- under Section 117 of Customs Act, 1962 on the assessee. 3. Aggrieved by the impugned order Assessee has filed Appeal No. C/273/2006. 4. Department is also aggrieved by the impugned order and have filed Appeal No. C/132/2007. 5. On behalf of Assessee, the learned counsel Sri. S. Murugappan reiterated the grounds of appeal and in particular made the following submissions. 5.1 No where in the notice there is any proposal to demand duty on the inputs used for production of the above praw....
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....side the scope of the show cause notice and on this very ground, the demand made is liable to be set aside. 5.6 Even for making the demand as mentioned above, the department has relied upon the subsequent amendments made in the relevant customs notification and this amendment was made much after the alleged clearances took place. Hence, even otherwise, these amendments cannot be made applicable to the clearance under question. Accordingly, viewed from many angles, there cannot be any demand for payment of duty. 5.7 The department has dropped the proposal for demand of duty on the imported as well as indigenous capital equipment. However, at the same time, he has confiscated the goods and imposed redemption fine of Rs. 1,00,000/- each ....
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....AR prayed that for the very reasons, and also for the reasons that Assessee is liable to pay duty in terms of bonds executed by them, customs duties leviable should be collected on prawn seed if it is not an excisable product, and the fact that the impugned order is vague, lacks clarity and without any basis for arriving at a proportionate figure of duty, the appeal C/132/2007 filed by the department may be allowed and the matter may be remanded for redetermination of correct duty liability by the Commissioner. 8. We heard both sides and perused the records carefully. 9. The crux of the matter is whether the impugned prawn seed have been removed from the EOU into the DTA or whether they emanate from the Hatchery of M/s Magunta Exports....
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....r that matter, even the show cause notice does not reflect any evidence to the contrary, viz; that the Assessee has cleared prawn seed not from the coastal hatchery, but from the EOU itself. For reasons that have not been explained or justified in the impugned order, while holding the prawn seed as not excisable and relying upon Tribunal decision to conclude that there is no warrant either to demand customs duty on shrimp seed, the adjudicating authority has gone ahead to demand 'proportionate duty on the raw material, consumables used in the production of seed cleared into DTA' which action is not supported by any of the proposals of the show cause notice. Merit is also found in the assessee contention that when the period of dispu....