Custom, Excise & Service Tax Tribunal
Semco Electric Pvt. Ltd. (Unit - I) vs Cce Goa on 12 June, 2019
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
MUMBAI
WEST ZONAL BENCH, MUMBAI
Custom Appeal No. 170 of 2010
(Arising out of Order-in-Appeal No. GOA/CUS/CM/121/2009 dated 30.11.2009
passed by the Commissioner of Customs & Central Excise (Appeals), Goa.)
M/s Semco Electric Pvt. Ltd. ........Appellant
Gat No. 155, 1541/1,
Mahalunge Village, Chakan Talegaon Road,
Chakan Pune - 410501
VERSUS
Commissioner of Customs & ........Respondent
Central Excise, Goa
ICE House, EDC Complex, Plot No. 6,
Patto, Panaji, Goa -403001
APPERANCE:
Shri Narendra Dave, C.A. with
Ms. Lakshmi Menon, Advocate for the Appellant
Shri C. Singh, AC Authorised Representative with
Shri Manoj Kumar, AC Authorised Representative for the Respondent
CORAM:
HON'BLE MR. C J MATHEW, MEMBER (TECHNICAL)
HON'BLE DR. SUVENDU KUMAR PATI, MEMBER (JUDICIAL)
FINAL ORDER NO. A/86099/2019
Date of Hearing: 23.01.2019
Date of Decision: 12.06.2019
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PER: DR. SUVENDU KUMAR PATI
Clearance of capital goods imported earlier without payment of
Customs duty availing benefits of Notification No. 53/97-Cus. dated
03.06.1997 to DTA unit without appropriate authority's explicit
permission and without payment of appropriate customs duty that
was being held inadmissible by the Commissioner of Customs &
Central Excise (Appeals), Goa is assailed in this appeal.
2. Facts in nutshell is that appellant M/s Semco Electric Private
Limited is an 100% Export Oriented Unit (EOU) who imported Die
casting machine vide Bill of Entry No. 00137 dated 05.06.1999
availing benefit of Customs duty exemption under Notification No.
53/97-Cus. dated 03.06.1997 that was installed in the factory of the
appellant and utilised for manufacturing of resultant product namely
electric wiring accessories. The said machine become obsolete for
the appellant who decided to sell off the said machine to a DTA
buyer. Accordingly, para 6.16 (b) of the EXIM Policy 2002-07 was
followed, permission in writing was sought from the Deputy
Commissioner of the Central Excise & Customs, Division-V, Akurdi,
Pune and a copy of letter of appellant seeking permission from the
Deputy Commissioner was also forwarded to the Development
Commissioner, SEEPZ for information who allowed the sale of capital
goods under reference, in the DTA after payment of applicable duty,
subject to compliance of Custom procedure. Die casting machine
was cleared to one M/s Zenith Metaplast Pvt. Ltd. against an EPCG
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licence issued to Zenith on payment of excise duty @ 5% ad velum
on the transaction value of ₹10,25,000/-. During audit, objection
was raised in the audit report that appellant was refused permission
by the Development Commissioner for such DTA clearance and was
required to pay duty on the depreciated value and not on the basis of
transaction value and that merit rate of duty and not EPCG rate was
applicable for such clearance. Show-cause notice dated 20.02.2008
was issued to the appellant demanding differential duty of Rs.
6,24,710/- for violating the condition of Notification No. 53/1997-
Cus. along with proposal for confiscation of Die casting machine
valued at Rs. 12,79,745/- under Section 111(d) and (o) of the
Customs Act along with applicable interest under Section 28B as well
as penalty under Section 112(b) and 114A of the Act. Appellant
replied to the notice, matter was adjudicated upon, duty demand
along with interest, penalty and redemption fine in lieu of
confiscation of goods/machine were confirmed by adjudicating
authority and appellant's appeal before the Commissioner (Appeals)
also had yielded no fruitful result. Appellant is before us challenging
the legality of such order.
3. In the memo of appeal and during the course of hearing of
appeal, learned Counsel for the appellant Shri Narendra Dave and
Ms. Lakshmi Menon submitted that there was no requirement under
the EXIM Policy to obtain permission from the Development
Commissioner for clearance of imported machine and in any case
such permission was also granted by Development Commissioner.
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He further submitted that goods was clearly assessed by the proper
officer and who permitted clearance from the bonded warehouse of
the appellant which assessment cannot be reopened without
reviewing the order of assessment passed by the proper officer under
Section 129D of the Act. In placing reliance on the Policy Circular
No. 5 (RE-2005)/2004-2009 dated 13.05.2005 whereby clarification
was given by DGFT that under EPCG Scheme concessional rate of
duty was to be paid and not full duty of Excise and placing reliance
on the decision reported in Sahajanand Technologies (P) Ltd. Vs CCE
- 2007 (210) ELT 108 (Tri.-Ahmd), Orbit Fabrics Ltd. Vs CCE - 2009
(248) ELT 359 (Tri.-Ahmd.), CCE Vs Orbit Fabrics Ltd. - 2011 (264)
ELT 53 (Guj.), Welspun Zucchi Textiles Vs CCE - 2006 (204) ELT 401
(Tri.-Mum.), CCE Vs. Emcure Pharmaceuticals Ltd. - 2014 (307) ELT
180 (Tri.-Mum.), CCE Vs. Emcure Pharmaceuticals Ltd. - 2016 (342)
ELT 172 (Bom.), he also submitted that extended period is not
invokable in the instant case for which order passed by the
Commissioner (Appeals) is required to be set aside.
4. In response to such submissions, learned AR Shri C. Singh,
Assistant Commissioner with Shri Manoj Kumar, Assistant
Commissioner for the respondent-department argued in support of
the reasoning and rationality of the order passed by the
Commissioner (Appeals) in holding in-applicability of Notification No.
53/1997-Cus. and non-filing of ex-bond Bill of Entry by the appellant,
for which they sought for no interference by the Tribunal in the order
passed by the Commissioner (Appeals). He placed reliance in the
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case laws reported in Unimark Remedies Ltd. Vs. Commissioner of
Customs (Export Promotion), Mumbai - 2017 (355) ELT 193 (Bom.)
in support of his contention.
5. We have heard from both the sides at length and perused the
case record. The primary objection in the audit report was that
appellant was refused permission/NOC to clear the said Die casting
machine to DTA and had not paid duty on the depreciated value of
the goods which was valued at Rs. 12,29,745/- and paid excise duty
on transaction value of Rs. 10,25,000/-. Contention of the appellant
is that no such permission was a requirement under the EXIM Policy
and alternatively it was submitted that express permission was also
granted by the Development Commissioner. Therefore, it is
imperative to have a look at the content of the letter issued by the
Assistant Development Commissioner SEEPZ to the appellant, the
text of which reads (Annexure-4) as under:-
"I am directed to refer to your letter No. SEMCO/03-04
dated 7th April, 2003, on the subject cited above and to
say that in terms of Para 6.20 (d) an EOU can apply for
permission for conversion of EOU under EPOG Scheme as
one time option. However, you propose to sell one
machine and hence your request cannot be considered.
However, you may sell the CG under reference in the
DTA after payment of applicable duties subject to
compliance of Customs Procedures."
5.1 A bare reading of the said communication would reveal that the
Development Commissioner was authorised to grant permission for
conversion of EOU under EPCG scheme as one time option for which
the request to sell one machine could not be considered at their end
but appellant may sell the same in the DTA after payment of
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applicable duties subject to compliance of Customs Procedures.
Therefore, the finding in Order-in-Original and Order-in-Appeal
passed stating Development Commissioner had refused permission
for clearance of goods to DTA is erroneous.
6. The second objection of audit is the duty had been paid on
depreciated value and not on transaction value and the rate of duty
should be as applicable at the time without any concession by
invocation of benefit extended under EPCG scheme. Clarificatory
Circular issued by DGFT policy no. 5 (RE-2005)/2004-2009 dated
13.05.2005 as referred above in the preceding para clearly indicates
that concessional rate of duty is applicable to the appellant.
However, the same should have been on the depreciated value of the
goods/machinery which is admittedly not done in the instant case
but when the Superintendent of Central Excise accepted the same
and debited the transaction value as declared by the appellant before
allowing clearance of the said machine and accordingly commercial
invoice was raised thereafter with counter signature of Range
Superintendent, Appellant's assertion that re-assessment cannot
done without review of the order of assessment has its force in view
of Section 129D of the Act, which also finds its approval in the case
laws reported in Madurai Power Corporation (P) Ltd. Vs Deputy
Commissioner of Central Excise, Madurai-I reported in 2008 (229)
ELT 521 (Mad.) and Vittesse Export Import Vs. Commissioner of
Customs (EP) Mumbai reported in 2007 (224) ELT 241 (Tri.-
Mumbai). Therefore no mis-declaration or suppression of the fact
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can be attributed to the conduct of appellant to invoke extended
period also. Hence the order.
ORDER
7. The appeal is allowed and the order passed by the Commissioner of Customs & Central Excise (Appeals), Goa vide Order-in-Appeal No. GOA/CUS/CM/121/2009 dated 30.11.2009 is hereby set aside.
(Order pronounced in the court on 12.06.2019) (Dr. Suvendu Kumar Pati) Member (Judicial) (C J Mathew) Member (Technical) Prasad