TaxTMI 
TaxTMI 
2023 (11) TMI 916
X X X X Extracts X X X X
X X X X Extracts X X X X
....ed goods will be sold as scrap and duty would be discharged on the scrap value of obsolete raw materials. However Adjudicating authority vide order dated 24.01.2011 directed the Appellant to destroy or dispose the goods only after payment of duty on the assessable value at the time of import with interest till date of payment of duty. Aggrieved by said order, an appeal was filed by the appellant before the Commissioner Appeals. In view of the Notification No. 52/2003-Cus dated 31.03.2003, Commissioner Appeals rejected the appeal. Aggrieved by the said impugned order, present appeal is filed. 2. When the matter came up for hearing, the learned Counsel for the appellant submitted that due to rapid technological development/advancement, the imported raw material/components become obsolete and unfit for manufacture and therefore they sought permission from the jurisdictional authority from time to time to destroy the goods on payment of duty on the scrap value of the destroyed goods. The Learned Counsel also submitted that the impugned order is issued without considering the provisions of Para 6.15(b) of the Foreign Trade Policy r/w Notification No.53/2003-Cus dated 31.03.2003 which....
X X X X Extracts X X X X
X X X X Extracts X X X X
....material or remnants arising in the course of production, manufacture, processing or packaging, if such scrap or waste material or remnants are destroyed within the unit or destroyed outside the unit when it is not possible to destroy the same within the unit: Provided that this condition shall not apply in the case of unit engaged in manufacture and export of gem and jewellery. 4. Ld. Counsel further submitted that said condition of 8 Notification No.53/2003-Cus dated 31.03.2003 was substituted by Notification No. 34/2015-Cus dated 25.05.2015 wherein it is specifically mentioned that duty shall not be leviable. Condition of 8 is reproduced hereinbelow: "(8) Subject to the satisfaction of the said officer, duty shall not be leviable in respect of capital goods, raw material, consumables, spares, goods manufactured processed or packaged, and scrap or waste or remnants or rejects are destroyed within the unit after intimation to Customs authorities or destroyed outside the unit with permission of Customs authorities: Provided that this condition shall not apply in case of unit engaged in manufacture and export of gold, silver, platinum, diamond, precious....
X X X X Extracts X X X X
X X X X Extracts X X X X
....g Zones, are deemed to have been done or taken under the corresponding provisions of the current Notification No. 133/94-Cus., which has rescinded all these seven notifications. (ii) Whether defective or sub-standard computers and its parts which are not required (useful) for current production and have also not been used can be destroyed outside the zone i.e. whether the goods which were imported under an earlier notification could be allowed destruction under the present Notification No. 133/94-Cus. (iii) Whether the goods which are permitted for destruction within the zones can be taken for destruction outside the zones, as the notification only provides for destruction within the zone? 2. The issue has been examined by the Board. It is clarified that action taken under the rescinded seven notifications will be deemed to have been done or taken under the corresponding provisions of the current Notification No. 133/94 and the goods which were imported under any one of the earlier notifications could be allowed destruction under present notification. Under para 7 (ii) of Notification No. 133/94-Cus., the imported goods as such may be allowed destruction ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....% EOU in an Export Processing Zone, were rescinded. In this connection, the following doubts have been raised; (i) Whether the actions taken earlier under these seven Notifications which were issued for seven Export Processing Zones, are deemed to have been done or taken under the corresponding provisions of the current Notification No. 133/94-Cus., which has rescinded all these seven notifications? (ii) Whether defective or sub-standard computers and its parts which are not required (useful) for current production and have also not been used can be destroyed out side the zone i.e. whether the goods which were imported under an earlier notification could be allowed destruction under the present Notification No. 133/94-Cus.? (iii) Whether the goods which are permitted for destruction within the zones can be taken for destruction outside the zones, as the notification only provides for destruction within the zone ? (2) The Issue has been examined by Board. It is clarified that action taken under the rescinded seven notifications will be deemed to have been done or taken under the corresponding provisions of the current Notification No. 133/94 and t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s duty. The waste scrap or remnant arising in the course of manufacture only can be destroyed without payment of duty but duty has to be paid on obsolete goods. The Learned AR relied on the Final order of the Tribunal in the matter of Santox Pvt Ltd reported in 2012 (278) E.L.T 259 (Tri.-Mumbai) and M/s. S.K Patnaik reported in 2000 (115) E.LT 9 (SC). 11. Heard both sides. The only dispute is whether the raw materials/components procured without payment of duty under notification 52/2003-cus dated 31.03.2003 can be permitted to be destroyed without payment of duty when the goods become obsolete and unfit for manufacture. 12. As per the Circular dated 10.9.1999, the supplier of such defective/damaged or otherwise unfit for use, goods, does not insist on re-export of such goods, the same may not be re-exported subject to the condition that such goods shall be either destroyed with the permission of the Assistant Commissioner in-charge of the unit or cleared into DTA on payment of full Customs duty. Board Circular No. 60/1999-Cus dated 10.09.1999 is reproduced below: EOU/EPZ/STP units - Replacement of goods exported or imported and found damaged or defective or otherwis....
X X X X Extracts X X X X
X X X X Extracts X X X X
..... Kindly acknowledge receipt of this Circular. Difficulties, if any, faced in the implementation of the above changes, may be brought to the notice of the Board immediately. It is an admitted fact that appellant vide letter dated 01.09.2010 sought permission from the Department for destruction of obsolete imported raw material and components. They have also informed that destroyed goods would be sold as scrap and duty discharged on the scrap value of the obsolete raw materials. Thus, the adjudication authority ought to have allowed the request of the appellant for destruction of such goods either within the unit or destroyed outside the unit when it is not possible to destroy the same within the unit without insisting for payment of custom duty especially when respondent have allowed destruction of obsolete goods subject to payment of scrap value earlier. 13. Moreover para 6.15 (b) of the Foreign Trade Policy clearly states that ----- "no duty shall be payable in case capital goods, raw material, consumables, space, goods manufactured, processed and packaged, and scrap/waste/remnants/rejects are destroyed within unit after intermission to customs authority or destroyed outsid....