Custom, Excise & Service Tax Tribunal
Sahuwala High Pressure Cylinders (P) ... vs Visakhapatnam-Cus on 4 March, 2020
(1)
Appeal No. C/38/2011
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
REGIONAL BENCH AT HYDERABAD
Division Bench - Court No. - I
Customs Appeal No. 38 of 2011
(Arising out of Order-in-Appeal No.53/2010-VCH dated 30.09.2010 passed by Additional
Commissioner of Customs, Central Excise & Service Tax, Visakhapatnam)
Sahuwala High Pressure .. APPELLANT
Cylinders Pvt Ltd.,
Plot No. 04, Survey No. 42,
G.Block, Autonagar,
Visakhapatnam - 530 012.
VERSUS
Commissioner of Customs, .. RESPONDENT
and Service Tax Visakhapatnam- Cus 4th Floor, Customs House, Port Area, Visakhapatnam, Andhra Pradesh - 530 035.
Appearance Shri B. V. Kumar, Advocate for the Appellant. Shri C. Mallikarjun Reddy, Superintendent for the Respondent.
Coram: Hon'ble Mr. ASHOK JINDAL, MEMBER (JUDICIAL) Hon'ble Mr. P.V. SUBBA RAO, MEMBER (TECHNICAL) FINAL ORDER No. A/30775/2020 Date of Hearing:10.02.2020 Date of Decision:04.03.2020 [ORDER PER: ASHOK JINDAL]
1. The appellant is in appeal against the Order-in-Appeal No.53/2010- VCH dated 30.09.2010 wherein differential duty has been demanded from the appellant in terms of Notification No. 52/2003-Cus dated 31.03.2003 and Notification No. 22/2003-CE dated 31.03.2003 alleging that appellant is liable to pay duty at the rate prevailing at the time of import/procurement of the goods, whereas appellant paid the duty at the rate prevailing at the time of debonding of the unit.
2. Heard the parties.
(2)Appeal No. C/38/2011
3. The said issue has been dealt with by this Tribunal in their own case in Appeal No. C/1412/2011 wherein this Tribunal has held as under:-
"8. Heard the parties.
9. From the arguments advanced by both sides, the following issues emerge:
1) whether appellant is liable to pay duty from the date of demanding of their unit on the rate of duty prevailing on such date or at the rate of duty prevailing at the time of import?
2) whether the appellant is liable to pay interest for the intervening period or not?
Issue No.1
10. For better appreciation of the issue, Notification No. 52/2003- CUS dated 31.03.2003 as amended is extracted here:
(3) The unit executes a bond in such form and for such sum and with such authority, as may be specified by the said officer, binding himself, -
(a) to bring the said goods into the unit or and use them for the specified purpose mentioned in clauses (a) to (e) in the opening paragraph of this notification;
(b) to maintain proper account of the receipt, storage and utilization of the goods;
(c) to dispose of the goods or services, the articles produced, manufactured, processed and packaged in the unit, or the waste, scrap and remnants arising out of such production, manufacture, processing or packaging in the manner as provided in the [Foreign Trade Policy] and in this notification;
(d) to pay on demand -
(I) an amount equal to duty leviable on the goods and interest at a rate
as specified in the notification of the Government of India in the Ministry of Finance (Department of Revenue) issued under section 28AB of the said Customs Act on the said duty from the date of duty free import of the said goods till the date of payment of such duty, if
(i) in the case of capital goods, such goods are not proved to the satisfaction of the said officer to have been installed or otherwise used within the unit, within a period of one year from the date of import or procurement thereof or within such extended period not exceeding five years as the said officer may, on being satisfied that there is sufficient cause for not using them as above within the said period, allow;
(ii) in the case of goods other than capital goods, such goods as are not proved to the satisfaction of the said officer to have been used in connection with the production or packaging of goods in accordance with SION for export out of India or cleared for home consumption within a period of three years from the date of import or procurement thereof or within such extended period as the said officer may, on being satisfied that there is sufficient cause for not using them as above within the said period, allow:(3)
Appeal No. C/38/2011 Provided that no such clearance or debonding of capital goods under the Export Promotion Capital goods Scheme of Chapter 5 of the Foreign Trade Policy shall be allowed if the unit has not fulfilled the positive NFE criteria at the time of clearance or debonding in terms of Para 6.18(d) of Foreign Trade Policy:
Provided further that -
(a) Such clearance or debonding of capital goods may be allowed on payment of duty on the depreciated value thereof and at the rate in force on the date of debonding or clearance, as the case may be, if the unit has fulfilled the positive NFE criteria taking into consideration the depreciation allowable on the capital goods at the time of clearance or debonding. In case of failure to achieve the said positive NFE, the depreciation shall be allowed on the value of capital goods in the same proportion as the achieved portion of NFE.
The notification no. 22/2003-CE dated 31.03.2003 as amended is also extracted here below:
4(b) in case of failure to achieve the positive Net Foreign exchange earning, the duty equal in amount to the portion of the duty leviable on the said goods but for the exemption contained in this notification and the duty so payable shall bear the same proportion as the unachieved portion of Net foreign exchange Earning bears to the positive Net Foreign exchange Earning to be achieved along with interest at the rate of as specified in the notification of the Government of India, Ministry of Finance, Department of Revenue issued under section 11Ab of the Central Excise Act, 1944, from the date of procurement of the said goods till the payment of such duty.
Clause 8(i) such clearance or debonding of capital goods may be allowed on payment of an amount equal to the excise duty on the depreciated value thereof and at the rate in force on the date of debonding or clearance, as the case may be, if the unit has fulfilled the positive NFE criteria taking into consideration the depreciation allowable on the capital goods at the time of clearance or debonding. In case of failure to achieve the said positive NFE, the depreciation shall be allowed on the value of capital goods in the same proportion as the achieved portion of NFE. The depreciation shall be allowed in straight line method as specified below, namely:-
(a) For computer and computer peripherals:
for every quarter in the first year @ 10%
for every quarter in the second year @ 8%
for every quarter in the third year @ 5%
for every quarter in the fourth & fifth year @ 1%
Further as per Section 15 of the Customs Act, 1962 provides the date of determination of rate of duty and tariff valuation of imported goods.
11. The same is extracted here below:
S.15. Date of determination of rate of duty and tariff valuation of imported goods. -
(1) The rate of duty and tariff valuation, if any, applicable to any imported goods, shall be the rate and valuation in force,--
(a) in the case of goods entered for home consumption under section 46, on the date on which a bill of entry in respect of such goods is presented under that section;
(b) in the case of goods cleared from a warehouse under section 68, on the date on which the goods are actually removed from the warehouse;
(c) in the case of any other goods, on the date of payment of duty:(4)
Appeal No. C/38/2011 Provided that if a bill of entry has been presented before the date of entry inwards of the vessel by which the goods are imported, the bill of entry shall be deemed to have been presented on the date of such entry inwards.
12. As per Section 15 (1)(b) of the act, the duty is payable at the time when goods were actually removed from warehouse under Section 68 of the Act. Admittedly, in the case in hand, the appellant is a 100% EOU and having letter of permission to work as 100% EOU. As the appellant could not achieve positive NEP, the appellant applied for demanding and at the time of demanding filed bills of entry which are not in dispute. Therefore, in terms of Section 15 of the Act, the appellant is liable to pay duty at the rate prevailing at the time of debonding. This is also in consonance of Clause 8(3A)/ 8(4A) of the notification which provides that the appellant/ assessee is liable to pay duty at the rate in force on the date of debonding if unit failed to achieve said positive NFP. Therefore, with regard to the demand of duty of Rs. 74,09,538/-, the appellant is liable to pay duty at the rate of duty prevailing at the time of debonding of the unit. The duty is to be calculated accordingly.
13. With regard to indigenously procured capital goods in terms of Notification No. 22/2003-CE dated 31.03.2003 the clause 8(i) of the notification clearly specifies that the duty is payable at the rate in force on the date of debonding. As per the said notification, the appellant is liable to pay duty at the rate in force on the date of debonding. Therefore, with regard to the demand of differential duty of Rs. 21,03,122/-, we hold that appellant is liable to pay duty at the rate of prevailing on the date of debonding. The duty is to be calculated accordingly.
Issue No.2
14. In terms of Notification No. 132/2004-Cus (NT) dated 25.11.2004 the appellant are not liable to pay interest as held by this Tribunal in the case of Business Process Technologies India Pvt Ltd., (supra) where in this Tribunal held as follows:
5. We have considered the submissions made at length by both sides and perused the records. The issue involved in this case is whether the appellant, an export oriented unit, is liable to pay the interest for the period during which the capital goods (procured without payment of duty) were warehoused in export oriented unit. It is seen from the records that the appellants had warehoused the goods in 2003 and the validity of the said bond is up to 2008. It is undisputed that the appellants were granted permission for debonding in 2007.
Capital goods were removed from the factory premises in January, 2008. The clauses of Notification No. 132/04-Cus., dated 25-11-2004 reads as under :
"In exercise of the powers conferred by sub-section (2) of section 61 of the Customs Act, 1962 (52 of 1962) (hereinafter referred to as said Act) and in supersession of the notification of Central Board of Excise and Customs, No. 67/95 (N.T.) Customs, dated the 1st November, 1995 vide number S.O. 870 (E), dated the 1st November, 1995, the Central Board of Excise and Customs, being satisfied that it is necessary so to do in the public interest hereby exempts interest accrued on the customs duties payable on the capital goods, components and spares of capital goods and material handling equipments (fork- lifts, overhead cranes, mobile cranes, crawler cranes, hoists and stackers), office equipments, captive power plants including captive generating sets, spares of captive power plants and captive generating sets, tools, jigs, gauges, fixtures, moulds, dies instruments and accessories, (other than raw materials, components and consumables) authorised to be imported by an export oriented undertaking or an Electronic Hardware Technology (EHTP) unit or a Software Technology Park (STP) Unit and warehoused (5) Appeal No. C/38/2011 under Chapter IX of the said Act, at the time of clearance from Customs Bended Warehouses under section 68 of the said Customs Act.
Explanation. - For the purposes of this notification, -
(i) "Electronic Hardware Technology Park (EHTP) unit" means a unit established under and in accordance with the Electronic Hardware Technology Park Scheme notified by the Government of India in the Ministry of Commerce, vide, notification No. 5 (RE-95)/92-97, dated the 30 April, 1995 and approved by the Inter Ministerial Standing Committee;
(ii) "export oriented undertaking" has the same meaning as assigned to "hundred per cent export oriented undertaking" in clause (ii) to the Explanation 2 to sub-section (1) of section 3 of the Central Excise Act, 1944 (1 of 1944); and
(iii) "Software Technology Park (STP) unit" means a unit established under and in accordance with the Scheme notified by the Government of India in the Ministry of Commerce, vide, notification No. 4(RE-95)/92-97, dated the 30th April, 1995 and approved by the Inter Ministerial Standing Committee".
6. It can be seen from the above reproduced notification that Central Govt. has exempted the interest accrued on the customs duty payable by an export oriented unit. We also find that provisions of Section 61 clearly exclude the liability to pay interest for a period of 5 years from the date of bonding. We find that the decisions of this Bench in the case of Stelfast India P. Ltd. squarely covers the issue in favour of the appellant. We may reproduce the said ratio:
"On a careful consideration, we notice that the notification No. 67/95-Cus. dated 1-11- 1995 exempts interest accrued on the Customs duty payable on the warehoused goods under Chapter IX of the Customs Act. Both the authorities have failed to see this provision of law and, therefore, the confirmation of interest is not justified. Furthermore, the plea taken that the Customs Authorities has taken their own time to de-bond the unit from the EOU Scheme despite the Government of India, EOU Section of the Ministry of Industry granting permission to the appellant to withdraw from the EOU scheme on 20-2-1996 and in such a circumstance, interest is not payable in the light of the cited judgments is also a well taken ground. On both grounds, interest is not leviable and hence the impugned order is set aside. The appeal is allowed with consequential relief, if any."
15. In view of the above observations, we pass the following order:-
a) for imported capital goods, the appellant is liable to pay duty at the rate of duty prevailing on the date of debonding
b) the appellant is liable to pay duty for indigenously procured capital goods at the rate of duty prevailing on the date of debonding and
c) no interest is payable by the appellant
16. The Revenue is directed to calculate the duty at the rate prevailing on the date of debonding. If any, amount is payable by the appellant, the same is shall be paid within one month."
4. Following the above decision of this Tribunal in the appellant's own case, we pass the following order:-
a) for imported capital goods, the appellant is liable to pay duty at the rate of duty prevailing on the date of debonding (6) Appeal No. C/38/2011
b) the appellant is liable to pay duty for indigenously procured capital goods at the rate of duty prevailing on the date of debonding and
c) no interest is payable by the appellant
5. The Revenue is directed to calculate the duty at the rate prevailing on the date of debonding. If any, amount is payable by the appellant, the same is shall be paid within one month.
6. The Appeal is disposed of in the above terms.
(order was pronounced in court on 04.03.2020) (ASHOK JINDAL) MEMBER (JUDICIAL) (P. VENKATA SUBBA RAO) MEMBER (TECHNICAL) Jaya