COMMISSIONER OF CUSTOMS Vs. MOTOROLA INDIA LIMITED

JUDGEMENT

(1.) This appeal is by the Revenue challenging the order passed by the CESTAT holding that the Assessee is entitled to the benefit of DEEC Scheme in terms of Notification No. 30/97-Cus dated 1.4.1997 read with para 7.4, of the EXIM policy 1997-2002 and as such he is not liable to pay any custom duty.

(2.) The Assessee is a leading manufacturer of pagers. A specific intelligence received by the Directorate of Revenue Intelligence to the effect that the Respondent had stopped manufacturing of pagers and hence a certain portion of the duty-free material imported under DEEC Scheme (with Actual User Condition) had been written off in their books of accounts. As the goods imported under Actual User Condition should only be used for manufacturing of the declared final product as no more manufacturing is being done, the officers of the DRI took up further investigation in the matter. The Assessee was called upon to submit the list of such unutilised items which are imported under Customs Notification No. 30/97-CUS dated 1.4.1997 and lying unutilised in the manufacture of pagers. The Assessee submitted a list of such unutilised items along with details of the part number, their quantity and their value and sought for further time to link unutilised items to the bill of entry and the relevant assessable value. On 23.5.2001 they submitted a complete list of all unutilised items totally identified at American dollars. The Assessee also submitted that they have ceased manufacturing pagers and the said materials have become obsolete as far as they are concerned.

(3.) After the enquiry a show-cause notice was issued to the Assessee requiring them to show-cause as to why customs duty amounting to Rs. 96,17,498/- should not be demanded from them in terms of the notification No. 30/97-Cust dt. 1.4.97; why the said imported raw materials under the notification and not utilised in terms of the conditions of the said notification should not be confiscated; why interest at the rate of 24% p.a. on the duty should not be demanded and also why penalty should not be imposed on them.