2023 (5) TMI 651

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....er section 11AC of Central Excise Act, 1944 and rule 25 of Central Excise Rules, 2002 in order [order-in-original no. 23/CEX/COMMR/KOP/2012 dated 22nd August 2012] of Commissioner of Central Excise, Kolhapur is impugned before us in this appeal of M/s Jadhav Exports Pvt Ltd. Two separate appeals have been filed in relation to the duties under the two statutes and both are taken for disposal in this common order. 2. The appellant operates '100% export oriented unit (EOU)', issued with letter of permission (LoP) dated 7th August 2000 by the Secretariat for Industrial Approvals (SIA) entitled them to procure capital goods, inputs and consumables - from abroad and from domestic sources - for the manufacture and export of 'footwear' for a period of 10 years and, in accordance with the extant procedure, had secured 'private bonded warehouse (PBWH)' license for their designated premises both under Central Excise Act, 1944 and Customs Act, 1962. The issue in dispute pertains to the dutiability of capital goods, valued at Rs. 1,99,70,416, and raw materials, valued at Rs. 23,33,673, imported by availing the benefit of notification no. 53/97- Cus dated 3rd June 1997 and raw materials, valued....

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....grant of depreciation with effect from commencement of commercial production. It was also contended that duty liability on raw materials procure domestically will continue to subsist only to the extent of stock in hand on date of the bonding. It is contended that the unit having been lying idle since 2006, the value of the raw materials is 'nil' and, hence, not liable to duty. 6. Learned Authorised Representative relies upon notification no. 6/98-CE (NT) dated 2nd March 1998 on the correctness of recourse to the general bond for recovery of duties forgone in the event of nonfulfilment of obligation/conditions in notification. He also placed reliance on the decision of the Hon'ble High Court of Bombay in Commissioner of Central Excise, Thane-II v. Bee International [2013 (298) ELT 193 (Bom)]. He pointed out to the contents of Notification no. 53/97-Cus dated 3rd June 1997 and circular no. 12/2008-Cus dated 24th July 2008 of Central Board of Excise & Customs (CBEC). According to him the decisions of the Tribunal in Noel Agritech Ltd v. Commissioner of Central Excise, Mangalore [2006 (195) ELT 88 (Tri-Bang)] and in Dinesh Agro Products Ltd v. Commissioner of Central Excise Pune-III [....

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....other than these notifications. A cursory perusal of the impugned order would indicate that violation of the conditions of the notifications are not the basis of the confirmation of demand and the detriments enumerated therein. This alone should be sufficient aside the impugned order. 6. The mandate of export obligation under this scheme has altered substantially over the time that this dispute has persisted. The computation thereof, either applicable at the time of issue of Letter of Permission or applicable at the time of issuing of the show cause notice, vary substantially. It would appear that the impugned order has not distinguish between the two.... It is further contended that the action to recover duties premature since the unit does not cease to operate till debonding and that eligibility for depreciation, as prescribed in the circulars of Central Board of Excise & Customs, has not been extended to them. 7. All the above contentions have not been considered in the impugned order....... 8. It is now well-settled by the decision of the Tribunal in Commissioner of Customs & Central Excise, Vadodara v. Solitaire Machine Tools P Ltd [2003 (152) ELT 384 (Tri-Mumbai)] ho....

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....e the outflow but also to add prescribed value in the manufacturing process. Now, units that are in that foreign exchange positive on annual, as well as cumulative, performance is to be considered to be compliant with the export obligation prescription. Noncompliant units would be subject to proceedings for recovery of duty foregone on the procurement of raw materials in excess of that utilized for manufacture of export goods and on consumables as well as the amortised value of capital goods proportion to the ascertained efficiency. Thus, the export-oriented unit scheme has undergone changes over a period of time and, more significantly, during the tenor of the 'letter of permission' of the appellant. The amending notifications issued under Customs Act, 1962 and Central Excise Act, 1944 superseded, and substituted, the existing notifications. Hence, the condition subject to which the goods are imported were not the same for the respective years of evaluation for compliance to determine the continuance of the privilege of duty exemption on capital goods and recovery of duties. We hold that the duty liability, if any, should be with reference to Notification No. 52/2003-Cus. 5. Th....