COSCO BLOOSOMS PVT. LTD. Vs. CC

JUDGEMENT

(1.) The appellants is an EOU. It produces cut rose flowers for export. It is also entitled to selling part of the produce, as permitted by the Development Commissioner, in the domestic tariff area.

(2.) The Commissioner of Customs and Central Excise, Central Excise Commissionerate, Delhi -III has demanded a customs duty of about Rs. 88 Lakhs from the appellant under Section 29 of the Customs Act 1962 read with Notification No. 126/94 dated 3.6.1994. There is a demand for interest under Section 28AA of the Customs Act 1962 and imposition of penalty of Rs. 17 lakhs under Section 114 A of the Customs Act 1962. The duty amount demanded is the customs duty payable on about Rs. 3 Crores worth flowers cleared to the domestic area during the period 1997 -98 to 2001 -2002. The contention of the appellant in the present appeal is that the findings in the order are entirely contrary to the settled law on the issue. It is pointed out that goods produced in an EOU are subject to central excise duty as applicable and not customs duty. The learned Counsel for the appellants also has pointed out that flowers are not excisable under the central excise tariff. Given legal position, it is the submission of the learned Counsel for the appellants that the customs duty demand under the impugned order is not sustainable in law at all. The learned Consultant for the appellant has also pointed out that the impugned order is contrary to the clarification contained in Central Board of Excise and Customs Clarification dated 24th May, 2001, which is stated as under : -