CHEMASIA INDUSTRIES LTD. Vs. COMMISSIONER OF CUSTOMS, GUNTUR

JUDGEMENT

(1.) THIS application filed by M/s. Chemasia Industries Ltd., Nellore District (CIL or EOU hereafter) seeks waiver of pre -deposit of duty of Rs. 5,21,27,308/ - and a total penalty of Rs. 2,40,10,000/ - confirmed against it.

(2.) THE appellant is a 100% EOU engaged in the production/manufacture of Sodium Perborate and Hydrogen Peroxide. The EOU had procured indigenous and imported capital goods as well as indigenous and imported raw materials/consumables without payment of duty under the EOU scheme. The EOU had failed to achieve required Net Foreign Exchange (NFE) and failed to fulfill export obligation. After due process of law the Commissioner of Customs, Guntur demanded duty of Rs. 5,21,27,308/ - from CIL and imposed on CIL a total penalty of Rs. 2,40,10,000/ -. The impugned order also confiscated the capital goods procured by the appellant indigenously as well as through import and offered to redeem the same on payment of a total fine of Rs. 1,50,00,000/ -.

(3.) AS per the LOP issued in 1995, the EOU was permitted to manufacture and export Sodium Perborate. It started commercial production on 19 -1 -97. Vide order dated 20 -5 -92, the Development Commissioner imposed fiscal penalty of Rs. 10000/ - on CIL for ITS failure to fulfill export obligation for the period 19 -1 -97 to 31 -3 -2001. The appellant was allowed to manufacture and export Hydrogen Peroxide under the broad banding scheme in on 25 -11 -03. No capital goods were procured for production and export of Hydrogen Peroxide. In December, 2006, the Development Commissioner dropped proposal to penalize the EOU for failure to achieve prescribed NFE and to fulfill export obligation during the second block 1 -42002 to 31 -5 -2005. In November, 2006, the Development Commissioner granted in principle permission to the appellant to exit from the EOU scheme. Vide Order dt. 12 -11 -2007, the Development Commissioner issued final exit order to the appellant enabling it to exit from the EOU scheme.