2008 (12) TMI 160

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....value addition in 10 years. Since the unit was to operate in bonded premises, a private bonds warehousing licence was issued to them by the jurisdictional Assistant Commissioner on 5-4-88. The permitted capital goods were imported in April and May 1988. The Assistant Commissioner, invoking the provisions of Section 61(2) of the Customs Act, 1962, issued show cause notices dated 15-3-93, 31-1-95 and 14-7-95 for demand of interest on the duty chargeable on the capital goods imported free of duty. The Appellant applied to the Board vide letter dated 12-5-93 for interest waiver but no decision in this regard was taken by the Board. The Appellant, in response to their request for de-bonding made in 1995, were allowed to debond by the DGFT on 11-....

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....o.132/04-Cus. (N.T.), dated 25-11-04, exempted capital goods imported by an EOU from payment of interest accrued on the customs duties payable at the time of clearance. 2.2 Shri A.K. Rastogi, the learned Departmental Representative defended the impugned order reiterating the Commissioner (Appeals)'s findings. 3. I have carefully considered the submissions from both the sides. The Appellant had imported only the capital goods. At the time of import of the capital goods, in April-May, 1988, as per the provisions of Section 61(1)(a), the warehousing period for the capital goods imported by a 100% EOU was one year and this period could be extended by the Commissioner. As per the provisions of sub-section (2) of Section 61, interest on duty pa....

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....Us, who do not fulfil their export obligation and are allowed pre-mature debonding by the competent authority (SIA), do not merit waiver of interest, which is considered on the principle that the goods imported by the EOUs are meant for use in the manufacture of goods for export out of India and that in case the units get prematurely debonded without going into production or without export, the waiver of interest would not merit consideration and in such cases, the waiver would be considered only in very exceptional circumstances. 3.2 From the records of this case it appears that the first show cause notice for recovery of interest was issued on 15-3-93 and immediately thereafter the appellant submitted their representation dated 12-5-93 t....

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....ich the Ministry of Industry (SIA) permitted debonding, has to be considered as the date of debonding. The appellant's plea is that though it was pleaded before the Commissioner (Appeals) in course of hearing that the board vide Notification No. 67/95-Cus. (N.T.), dated 1-11-95 and subsequently vide Notification No.132/04-Cus (N.T.), dated 25-11-04 has exempted the capital goods imported by EOU from payment of interest accrued on the Customs Duty payable at the time of clearance, no finding in this regard has been given by the Commissioner. 4. I find that while at the time of import, the warehousing period in respect of the capital goods imported by an EOU was one year, the same vide the Finance Act, 1994 by amending Section 61 was increas....