TaxTMI 
TaxTMI 
2009 (1) TMI 235
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....and exporters of optical lenses. They are holders of Customs Bonded Warehouse Licence No. 8/97. The Appellants were issued a Letter of Permission (LOP) vide No. PER/225 (1994) /EOU/184/(94), dated 12-7-1994 for the manufacture of ophthalmic lenses by the Ministry of Industry, Government of India, New Delhi. Appellants commenced commercial production from 1-10-1995. During the period from 1994 to 1997, capital goods valued at Rs. 25,94,491/and inputs/consumables valued at Rs. 16,03,745/- were imported by the appellants for the manufacture and export of ophthalmic lenses. The minimum export obligation of Rs. 1,470/- lakhs was fixed and was to be achieved during the five years period commencing from October 1995 onwards. As against this the ap....
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.... Act, 1962 read with proviso to sub-section (1) of Section 28 ibid arid Notification No. 13/81-Cus., dt. 9-2-1981. (ii) The capital goods valued at Rs. 25,94,491/- and raw materials/consumables valued at Rs. 16,03,7451/- should not be confiscated under Section 111(o) of the Customs Act, 1962. (iii) Interest at the rate appropriate should not be charged on the Customs duty payable from the date of procurement till the date of payment under Section 28AB of the Customs Act, 1962, inasmuch as the condition stipulated in Notification No. 13/8 dated 9-2-1981 are not fulfilled. (iv) Penalty should not be imposed on them under Section 112 of the Customs Act, 1962, for the offences alleged to have been contravened by the appellants. The appellan....
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....bstituted by Notification No. 53/97-Cus., dt. 3-6-97. 3. The learned counsel appearing on behalf of the appellant would submit that: 3.1 The Unit was permitted to be set up as a 100% EOU vide Letter of Permission No. PER/225(1994)/EOU/1841(94) dated 12-7-1994 issued by the Ministry of Industry, Department of Industrial Development, Secretariat of Industrial Approvals, (EOU Section). The unit commenced commercial production w.e.f, 1-10-1995, in spite of stiff competition the unit was able to export goods valued at Rs. 23,95,7451- during the period 1-10-1995 to 31-3-2001 and earned convertible Foreign Exchange. 3.2 Learned counsel would submit that they could not fulfill the Export obligation due to stiff competition from China and the eme....
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....Cus., dated 31-3-2003, the depreciated value of the imported capital goods works out to Nil. Thus, the duty liability on such goods is also Nil. The redemption fine is imposed to eliminate the margin of profit. In the instant case, as per the guidelines given in Notification No. 52/2003-Cus., dated 31-3-2003, the depreciated value of the capital goods is Nil. As such to impose a redemption fine of Rs. 5,00,000/- is not justifiable in law. 3.5 Learned counsel would further submit that in terms of Para 6.16(b) of the EXIM Policy 2002-2007 - "No duty shall be payable in case capital goods, raw material, consumable, spares, goods manufactured, processed or packaged, and scrap/ waste/remnants/rejects are destroyed within the unit after intimati....
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....lants. It is also undisputed that the Development Commissioner had 'suo motu' cancelled the approval of EOU to the appellants. In the background of this, we find that the Show Cause Notice issued to the appellant is correct as they have executed the bond for the amount of the duty foregone by the revenue. It is also seen that the appellant's contention as regards the duty liability on the capital goods has been considered in totality by the Adjudicating Authority and after giving depreciation in accordance with law, he has worked out duty on the capital goods as 'nil'. Hence, there cannot be any grievance from the appellants on this count. 5.1 As regards the confirmation of demand of duty on raw materials and the imported goods which were ....
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....ot complied with the export obligation and as such, the capital goods/raw materials which were imported by them have violated the conditions of the Notification. Since, there is violation of the conditions of the Notification, the provisions of Section 111(o) of the Customs Act, 1962 are attracted and we hold that the goods are liable for confiscation and the order of confiscation, by the Adjudicating Authority cannot be faulted with. But considering the fact that the appellant had tried their level best to complete the export obligation as has been directed by the DGFT, and the failure of the appellant in non-compliance of the export obligation due to change in market conditions and the change in technology, we are of the considered view t....