TaxTMI 
TaxTMI 
2017 (6) TMI 46
X X X X Extracts X X X X
X X X X Extracts X X X X
....oods. The appellants had executed B17 Bond for Rs. 10,00,000/- on 28.4.1997 which was revised to Rs. 20,00,000/- on 9.10.2000. The LOP expired on 26.2.2000 and no objection was issued by the Development Commissioner on 15.1.2001. The officers of DGCEI visited the unit on 14.10.2003 and found that the appellants were indulging in clandestine removal of finished goods which were manufactured using the duty-free raw materials as well as capital goods. A show cause notice was issued alleging the same. The appellants approached the Settlement Commission admitting the duty liability with regard to the finished goods and the amount settled was paid by them being the duty on the finished goods. Thereafter, a show cause notice was issued demanding d....
X X X X Extracts X X X X
X X X X Extracts X X X X
....hed goods and also that the appellant had approached the Settlement Commission. That, therefore, the show cause notice issued after a prolonged period of seven years is unsustainable. 3. On behalf of Revenue, learned AR Shri B. Balamurugan submitted that the appellant have procured the goods under CT-3 certificate by availing the duty exemption under Notification No. 1/95. That, therefore, even if they have paid the duty on the finished goods, they are liable to pay duty on the inputs and capital goods used for manufacture of the finished goods. With regard to the issue of limitation, he submitted that the said ground is not applicable to the violation of the conditions in Notification No. 1/95. That since it is a continuous obligation, th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s already paid duty to the tune of Rs. 9,65,757/- on depreciated value of capital goods, at the time of debonding, which was accepted by the Assistant Commissioner, a further show cause notice invoking extended period is unsustainable. Clause 5 and 6 of Notification No.1/95 reads as under:- "5. Notwithstanding anything contained in this notification, the exemption contained herein shall also apply to the said goods used for the purposes of production, manufacture, processing or packaging of articles in a user industry and such articles (including rejects, waste, scrap and remnants arising out of such production, manufacture, processing or packaging of such articles) even if not exported out of India are allowed to be cleared outside the u....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... factory of manufacture and at rates in force on the date of payment of such excise duty. Explanation. - The depreciation in respect of goods covered by clause (a) shall be allowed for the period from the date of commencement of commercial production of the unit or the date of receipt of the goods in the unit, whichever is later, till the date of payment of duty." 5. From the above, it can be seen that even if the goods are not exported, the exemption as per the Notification is eligible if the finished goods are cleared on payment of appropriate excise duty. In the present case, undisputedly, the appellants have paid the excise duty on the finished goods. Therefore, the duty liability on the finished products have attained finality as pe....