Customs, Excise and Gold Tribunal - Ahmedabad
Anjaleem Enterprises Pvt. Ltd. vs Commr. Of C. Ex. And Cus. on 17 October, 2006
ORDER
Jyoti Balasundaram, Vice-President
1. All the three appeals involve common issues and are hence heard together and disposed of by this common order.
2. The brief facts of the case are that M/s. Anjaleem Enterprises Pvt. Ltd., Vadodara (hereinafter referred to as 'the importer') was a unit engaged in the manufacture and export of 'Development of Computer Software and Services' as 100% export oriented unit; which started commercial production w.e.f. 27-1-1986. The unit availed the benefit of exemption from payment of Customs duty under the provisions of Notification 13/81-Cus., dated 9-8-1981 and imported capital goods involving duty of Rs. 28,60,110/- during the period 1985-86 to 1990-91. The unit exported computer software and services during the above period and stopped manufacturing and export activity from July, 1990 onwards. Show cause notice dated 6-11-1997 was issued to the importer for recovery of Customs duty of Rs. 28,60,110/- on imported capital goods on the ground of failure to fulfil the condition of the notification by not achieving value addition and export obligation norms and proposing confiscation of the capital goods, and for imposition of penalty. The notice was discharged by the Commissioner vide order dated 27-4-1998 with directions that the request of the unit for clearance of the goods shall be considered by the Assistant Commissioner on merits in accordance with the law.
3. The unit applied for de-bonding on 22-5-1993 and vide letter dated 7-7-1994 the Department of Industrial Development permitted the unit to gift the equipment to any educational institution without payment of Customs duty subject to the condition that the recipient of the equipment was otherwise eligible to import the same without payment of Customs duty. Vide the letter dated 5-3-1998 the unit, on completion of the de-bonding formalities and removal of the imported capital goods to MS University without payment of duty, filed ex-bond bill of entry on 24-3-1998. Vide order dated 29-4-1998 the Assistant Commissioner passed the final assessment order wherein he confirmed demand of Rs. 20,67,062/- together with interest under Section 28AA of the Customs Act, 1962 and permitted the importer to gift the capital goods to MS University on payment of duty and interest. The Commissioner (Appeals) upheld the adjudication order in so far as it directed the importer to file revised bills of entry for ex-bonding capital goods on payment of duty but set aside the levy of interest. The importer has filed Appeal No. C/1264/2001 against the upholding of the duty demand while the Revenue has preferred the Appeal No. C/3720/2001 against the setting aside of the levy of interest.
4. Pursuant to the order dated 14-9-2001 of the Commissioner (Appeals) upholding the duty liability the Dy. Commissioner worked out the depreciated value of the capital goods/computers and parts thereof by computing the period of depreciation from the date capital goods were ex-bonded until the date when they were sought to be cleared in DTA as per letter dated 7-7-1994 of the Ministry of Industry granting de-bonding. The Commissioner (Appeals) rejected the plea that the period of depreciation should extend up to the date of payment of duty. This has given rise to Appeal No. C/830/2003.
5. We have heard both sides.
6. As regards liability to duty, in the absence of any notification exempting the importers from fulfilling the conditions in Notification 13/81 which provides for payment of Customs duty at the time of de-bonding on the depreciated value of the equipment, the importers are liable to pay duty and the letter dated 7-7-1994 of the Ministry of Industry together with Notification 51/96 which grants exemption to public funded research institutions or universities, etc., relied upon by the importers to establish that MS University to whom they were gifting the capital goods were eligible to directly import the goods without payment of duty, is not sufficient to extend the benefit of exemption from payment of duty in terms of the notification to the importers herein. We, therefore, uphold the finding of the Commissioner (Appeals) that the benefit of exemption from payment of duty is not admissible to them and that they are therefore liable to discharge duty liability on the imported goods. Thus Appeal No. C/1264/2001 is rejected.
7. As regards interest, in the light of the Tribunal's decision in the case of Bee International v. CCE, in Order No. A/636-639/WZB/2005/C-III, dated 27-5-2005 setting aside the levy of interest by holding that benefit of exemption from payment of interest is available under Notification 67/95-Cus., dated 1-11-1995 to 100% EOU even after the expiry of the warehousing period, we uphold the finding of the Commissioner (Appeals) that importers are not liable to pay interest. Appeal No. C/3720/2001 is therefore rejected.
8. As regards the period for which depreciation is to be allowed, in the light of the Tribunal's order in Commissioner of Customs & Central Excise, Vadodara v. Solitaire Machine Tools Pvt. Ltd. we hold that depreciation shall be allowed up to the date of payment of duty as per the language of the explanation to Notification 13/81 itself, and rejecting the contention of the Revenue that depreciation shall be allowed only till the date of application for de-bonding. We therefore hold that the period of depreciation should extend up to the date of payment of duty - the importers have not cleared the goods which are still in the bonded warehouse. We therefore set aside the impugned order and allow the Appeal No. C/830/2003.
9. The appeals are disposed of in the above terms.
(Pronounced in the Court on 17-10-2006)