ZYGO FLOWERS LTD. Vs. COMMISSIONER OF CUSTOMS, BANGALORE

JUDGEMENT

(1.) THE appellant is a 100% E.O.U. licensed for production of cut Roses. In terms of Notification 126/94 -Cus., dated 3 -6 -94 as amended, they had imported goods without payment of duty. Investigations reveal that the appellants cleared cut flowers valued at Rs. 9,67,979/ - produced by them into the Domestic Tariff Area (DTA) during the period from 26 -12 -95 to 28 -2 -97 without payment of duty. Hence the Revenue proceeded against the appellants for the demand of Customs duty amounting to Rs. 1,16,158/ - vide show cause notice dated 3 -7 -1997. The Original authority confirmed the Customs duty amounting to Rs. 1,16,158/ - in terms of Para 3 of Notification No. 126/94 -Cus., dated 3 -6 -94. As there was no mala fide in the matter, no penalty was imposed. The appellants approached the Commissioner (Appeals). The Commissioner (Appeals) in the impugned order dated 15 -11 -2002 has upheld the order of the Original Authority. The appellants strongly challenged the impugned Order -in -Appeal. Hence they have come before the Tribunal for relief.

(2.) SHRI M.S. Srinivasa, learned Advocate appeared for the appellants and Shri K.S. Bhat, learned SDR for the Revenue.

(3.) THE learned Advocate urged that the appellants were under a bona fide belief that the rejected cut flowers are not liable to any duty. There was actually no mala fide. As regards the demand of duty, he submits that in terms of Para 3 of the relevant Notification what was required to be paid by the appellants on clearance of the goods to the DTA is the Customs duty on the inputs used in the manufacture of the goods cleared and not the duty on the capital goods imported. It would be ridiculous to demand Customs duty on the entire capital goods just for the reasons that the appellants cleared certain rejected cut flowers into the DTA.