2024 (1) TMI 146

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....ted Unit engaged in the manufacture and export of terry towels had contravened the provisions of Exemption Notifications since they removed 22 looms that were imported without payment of duty, by discharging Basic Customs Duty (BCD) at a concessional 50% of the applicable duty amount that too by paying duty through CENVAT credit account which is not permissible. They should have cleared the looms on payment of applicable customs duty on the depreciated value thereof and at the full rate of duty in force on the date of such clearance. The total customs duty payable on the clearance of the said 22 looms worked out to Rs.9,58,783/- whereas the appellant removed the looms on payment of duty of Rs.6,31,584/- After due process of law, the origina....

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....period, notice has to be issued within six months from the relevant period. The details of the notice issued in the impugned matter were furnished in their written submission. Sl.No. Relevant date (Date of payment of duty) Cut off date for issue of SCN without invoking the extended period. 1 9.5.2008 8.11.2008 2 10.5.2008 8.11.2008 3 12.5.2008 11.11.2008 4 13.5.2008 12.11.2008 5 19.5.2008 18.11.2008 6 30.12.2008 29.6.2009 7 9.9.2010 8.3.2011 The learned counsel stated that SCN was issued on 6.5.2013 by invoking the extended period. In the SCN, it is alleged that duty was paid by willfully availing the ineligible exemption under notification 23/2003-CE and by wrong....

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.... suppression of facts with intent to evade. The core issue is applicability of Rule 17(1) of CER, 2002 or Rule 3(4) of CCR, 2004. It is an interpretational issue. Further, all the details are furnished in the invoices and ER-2 returns. So, extended period cannot be invoked. Reliance was placed on the decision of Hon'ble Apex Court in the case of International Merchandising Company, LLC Vs CST - 2022 (67) GSTL 129 (SC) and Kaybee Tex Spin Ltd Vs CC - 2022 (381) ELT 407 (Trib. Ahmd). Apart from the issue of limitation he further stated that in the bill of entry, customs duty was assessed as 5% as per notification 21/2002-Cus [Sl.No:251(1) List 31-Item 9]. The said rate is applicable for these clearances also. But, in the SCN, tariff rate of 7....

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.... by the appellant in the factory, the said exemption was not applicable for clearance of looms. As per the above notification, the capital goods imported by an EOU have to be cleared on payment of applicable customs duty on the depreciated value thereof at the rate in force on the date of such clearance. Therefore, at the time of removal of capital goods from the EOU, customs duty including CVD and additional duty of customs etc. leviable under sec. 12 of the Customs Act, 1962 r/w Customs Tariff Act, 1975 was payable. Hence the customs duty arrived at by the appellant under the above notification for discharging duty for the clearance of the said looms is not correct. Since the action of the appellant was done by suppressing the information....