Customs, Excise and Gold Tribunal - Mumbai
Search Chem Industries Ltd. vs Commissioner Of Customs on 14 October, 2000
Equivalent citations: 2001(127)ELT639(TRI-MUMBAI)
ORDER Gowri Shankar, Member (T)
1. The appeal is taken up for disposal after waiving deposit.
2. The appellant imported and installed two turbines for generation of electricity required for the manufacture of chemicals which it exported. It was granted exemption from import duty in terms of notification 111/95. This notification exempts inter alia capital goods imported under Export Promotion Capital Goods (EPCG) Scheme, one of the conditions being that the imported materials are used towards export of goods of a value to be specified by the licensing authority, the period within which the export proceeds are to be realized also being specified. The notification provides that export obligation to the extent specified is spread out over four blocks of two years each.
3. The appellant found one of the two turbines defective and had it sent abroad for repairs a year and half after installation. It imported another generator in lieu of this one which it installed. We are told by the advocate for the appellant that the obligation determined by the licensing authority takes into account the cost of the newly imported turbine in addition to the obligation already incurred on the old turbine which it replaced.
4. An order dated 11-10-1999 was issued by the Assistant Commissioner of Customs, calling upon the appellants to pay in terms of the bond executed as per the notification, the amount of duty on the turbine which was sent back on the grounds that the terms of the notification has not been complied with.
5. The importer appealed this order to the Commissioner (Appeals). Two primary grounds were urged in this appeal. The first was that notice to show cause, thereby giving the appellant opportunity of making its position clear has not been issued before the bond was enforced. The second was that no condition of the notification has been breached and therefore compliance with the condition has been made. The Commissioner (Appeals) has not at all dealt with either of these issues even in perfunctory manner as is evident from that portion of his order in which he discussed the submissions made before it.
"I have carefully gone through the record of the case and heard the appellant.
I find that appellant was served with a demand-cum-show cause notice. Appellant imported goods with a condition that the export product shall be manufactured out of the capital goods imported under the specified export promotion capital goods licence. The appellant was also required to submit proof of installation of machinery within the stipulated time frame. However, the appellant failed to comply with the conditions stipulated in notification No. 111/95-Cus. dated 5-6-1995. In view of this I hold the appellant liable to pay differential duty."
6. The order has been therefore passed in utter disregard of the elementary principles of natural justice. The appeal succeeds on this ground and is allowed and (impugned order) set aside. The Commissioner (Appeals) shall now dispose of the appeal pending before him by dealing with each of the points which has been made. He shall do so after giving the appellant a reasonable opportunity of being heard.
7. We direct that the bank guarantee for Rs. 15 crores should be continued during the pendency of the appeal before the Commissioner (Appeals) executed when this turbine was cleared from the customs in terms of the notification. The Commissioner shall thereafter not ask for any deposit.