STI INDIA LTD. Vs. CCE

JUDGEMENT

(1.) M /s. STI India Ltd. (STI), an EOU based in Indore imported High Speed Diesel Oil (HSD) during the period 1.3.99 to 31.7.04, through Kandla port and cleared the consignments against warehousing Bills of Entry. The consignments of HSD were assessed under Notification No. 53/97 -Cus dated 3.6.97 which exempted goods imported by an EOU from basic customs duty and additional duty of customs (CVD). In the Finance Act 1999, an additional duty of customs was imposed on HSD imported @ Rupee One per litre which was enhanced to Rupees 1.50 per litre with effect from 1.3.03 vide Finance Act 2003. There was no amendment to the Notification No. 53/97 -Cus dated 3.6.97, in the wake of imposition of this additional duty of customs on HSD. However, the consignments imported by STI during the material period were assessed by the assessing officers extending the benefit of Notification No. 53/97 -Cus (supra). A Show Cause Notice was issued by the ADG, Office of the DGCEI, Ahmedabad, to recover the exemption allowed on the warehousing Bills of Entry in so far as it related to the above additional duty of customs. Adjudicating the Show Cause Notice, the Commissioner of Customs, Indore accepted the plea of the appellant as regards limitation and confirmed the demand to the extent of Rs. 54,72,063/ - under Section 28 of the Customs Act, 1962 (the Act) as against the proposed demand of Rs. 2,57,73,158/ -. He demanded interest on the duty demanded under Section 28AA of the Act and imposed a penalty of Rs. 5 lakhs on STI under Section of the Act. The EOU is in appeal against the above order.

(2.) HEARD both sides. The appellant has argued that as per the exim policy, an EOU could import goods without paying any duty. That it was a slip on the part of the Government in not suitably revising the Notification No. 53/97 -Cus., extending the relief also for the impugned additional duty of customs.

(3.) WE find that the impugned goods were assessed on into bond Bills of Entry. The department has no case that the impugned goods were removed from the warehouse or were not used in the production of articles exported. As the impugned goods were not cleared from the warehouse, there was no collection of duty on the goods entailing short levy. Therefore, there cannot be any demand under Section 28 of the Customs Act. The demand is therefore not sustainable. As there is no finding that the appellant committed any act of omission or commission rendering the goods liable for confiscation under Section 111 of the Customs Act, we find that no penalty is imposable on the appellants under Section 112 of the Act.