2018 (5) TMI 466

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....re that the appellants were a 100% EOU and they were manufacturing chemicals falling under Chapter 29, which were generally used by manufacturers of pharmaceutical preparations or by pesticides manufacturers. The appellants sought to exit from the EOU Scheme on 31/03/2011 and got in-principle approval for the same. They submitted the details of exported goods, indigenous capital goods, raw-materials, components, consumables, spares, finished goods, work in progress and finished goods in the stock as on 31/03/2011 to the Departmental Authorities and also submitted the details of the duties of Customs & Central Excise to be paid on exit from EOU. While arriving at such duties of Customs & Central Excise, the appellants claimed benefit of Noti....

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....n stock in the EOU or lying at the premises of job workers. They were, further called upon to show cause as to why differential Central Excise duty of Rs. 8,12,05,337/- on clearance of Remnants which was also called Pyridine Residue from EOU to DTA Unit for the period from 01/04/2007 to 31/03/2011 and under-valuation for the period from 01/02/2010 to 31/03/2011 should not be demanded from them. The demand for the period from 01/02/2010 to 31/03/2011 was also by way of contesting the classification of said Remnants. They were also called upon to show cause as to why Customs duty of Rs. 9,64,168/- should not be demanded on imported capital goods by denying the benefit of depreciation. On contest the impugned Order-in-Original was passed where....

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....ey did not reach the RG-I Stage and they had not become chargeable to Central Excise duty and therefore, such demand is not sustainable. In respect of finished goods which were available in stock in their own factory premises and that of job workers, he contended that duty of Central Excise is to be discharged only on removal of goods from the place of manufacture and that since the goods were still within the factory premises and they were not removed from the factory by them or their job workers, the goods had not reached the stage of discharge of Central Excise duty and therefore, demand of differential Central Excise duty was not sustainable. In respect of differential Central Excise duty on Remnants of Rs. 8,12,05,337/- demanded on the....

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....d that catalyst on first charge were treated as capital goods and that there was not such allegation in the Show Cause Notice and therefore, the adjudication proceedings travelled beyond the Show Cause Notice and therefore confirmation of demand is not sustainable. 4. Heard the ld. A. R. for Revenue, who has supported the impugned Order-in-Original dated 03/02/2014. 5. Having considered the rival contentions and on perusal of the facts on record, we find that the differential Central Excise duty of Rs. 3,37,48,484/- is not sustainable for the reasons that the differential duty was demanded on the goods which had not came into existence and on the goods which were not removed from the factory of manufacture of appellant or their job wo....