Custom, Excise & Service Tax Tribunal
M/S. India Actuators Pvt. Ltd vs Cce, Coimbatore on 4 June, 2009
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
E/156/2002
(Arising out of Order in Original No. 7/2001-Cus dated 28.12.2001, passed by the Commissioner of Customs and Central Excise, Coimbatore).
For approval and signature
Honble Ms. JYOTI BALASUNDARAM, Vice President
Honble Mr. P. KARTHIKEYAN, Member (Technical)
_________________________________________________________
1. Whether Press Reporters may be allowed to see the :
order for Publication as per Rule 27 of the
CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the :
CESTAT (Procedure) Rules, 1982 for publication
in any authoritative report or not?
3. Whether the Honble Member wishes to see the fair :
copy of the Order.
4. Whether order is to be circulated to the :
Departmental Authorities? _________________________________________________________
M/s. India Actuators Pvt. Ltd. : Appellant
Vs.
CCE, Coimbatore : Respondent
Appearance Shri J. Shankar Raman, Adv., for the appellant Shri V.V. Hariharan, JCDR, for the respondent CORAM Ms. JYOTI BALASUNDARAM, Vice President Shri P. KARTHIKEYAN, Member (Technical) Date of hearing : 04.06.09 Date of decision : 04.06.09 Final ORDER No._____________ Per: Jyoti Balasundaram, Vide the impugned order, the Commissioner of Central Excise has confirmed a demand of Customs duty of Rs. 26,82,677/- on capital goods imported by the appellants herein and a demand of Customs duty of Rs. 5,46,607/- on imported raw materials and Central Excise duty of Rs. 13,541/- on duty free raw materials procured indigenously.
2. The brief facts of the case are that the appellants who were a 100% EOU became defunct as their product had become outdated and obsolete. Since their project was not viable, they applied for debonding and got the permission from Secretariat of Industrial Assistance on 25.03.97 for debonding, subject to the condition of payment of applicable customs and excise duties on the imported and indigenous capital goods, raw materials, components, consumables spares and finished goods in stock. Since the appellants had not paid the required duties even two years after the in principle debonding was granted, a show cause notice was issued on 11.04.2000, proposing recovery of duty and interest; the notice was adjudicated by the Commissioner who rejected the plea of the appellants for permission to destroy the capital goods as well as the raw materials and a small quantity of finished goods lying in stock, on the ground that as per Notification No.53/97-Cus which governs the appellant EOU, there was no provision for destruction of capital goods till 22.05.2000, while the show cause notice had been issued on 11.04.2000, which is prior to the above date. Hence this appeal.
3. We have heard both sides. We find force in the submission of the appellants that since the relevant Exim policy had already been amended prior to the issue of show cause notice, and it provides for destruction of obsolete capital goods, raw materials and finished goods and the request for destruction was made after the issue of the show cause notice, and the impugned order was passed well after the Notification itself had been amended to provide for destruction with the permission of the Assistant Commissioner, and since there is no dispute that the capital goods and raw materials had become unfit for manufacture and become obsolete in the market for actuators, the permission sought for destruction of the capital goods, raw materials and finished goods etc. by the appellants can be accepted. We find that Circular No.18/98-Cus dated 16.03.1998 issued by the CBEC clarifies that destruction of waste/scrap obtained in the process of manufacture in the Export Processing Zone when goods were imported under earlier notification not providing for destruction could be permitted under the notification currently in force. The Circular reads as under:-
Destruction of scrap/waste in the Export Processing??
I am directed to refer to Notification No. 133/94-Cus., dated 22-6-1994 governing 100% EOUs set up in various Export Processing Zones/Free Trade Zones. Under the above notification, seven earlier notifications each governing 100% EOU in an Export Processing Zone, were rescinded. In this connection, the following doubts have been raised;
(i) Whether the actions taken earlier under these seven Notifications which were issued for seven Export Processing Zones, are deemed to have been done or taken under the corresponding provisions of the current Notification No. 133/94-Cus., which has rescinded all these seven notifications.
(ii) Whether defective or sub-standard computers and its parts which are not required (useful) for current production and have also not been used can be destroyed out side the zone i.e. whether the goods which were imported under an earlier notification could be allowed destruction under the present Notification No. 133/94-Cus.
(iii) Whether the goods which are permitted for destruction within the zones can be taken for destruction outside the zones, as the notification only provides for destruction within the zone ?
(2) The issue has been examined by the Board. It is clarified that action taken under the rescinded seven notifications will be deemed to have been done or taken under the corresponding provisions of the current Notification No. 133/94 and the goods which were imported under any one of the earlier notifications could be allowed destruction under present notification. Under para 7 (ii) of Notification No. 133/94-Cus., the imported goods as such may be allowed destruction and under para 7(iii), the scrap/waste obtained in the process of manufacture may also be allowed destruction. In the cases where goods cannot be destroyed within the Zone because of the safety reasons or Municipal Corporations regulations, the Commissioner may permit destruction outside the Zone subject such conditions as may be prescribed by the Commissioner since this is only a procedural requirement and non-substantive in nature.
3. Pending cases may be processed accordingly and the receipt of this letter may kindly be acknowledged.
4. In the light of the above discussion, we direct that the application for permission to destroy the obsolete goods be allowed by the appropriate authority in terms of Notification No. 71/2000-Cus dated 22.05.2000.
5. The appeal is disposed of in the above terms.
(Order dictated and pronounced in the open Court)
(P. KARTHIKEYAN) (JYOTI BALASUNDARAM)
MEMBER (T) VICE PRESIDENT
BB
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