CHEMASIA INDUSTRIES LTD. Vs. COMMISSIONER OF CUSTOMS

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.) AFTER hearing both sides, we find that the Appellant had installed the capital goods procured and used it manufacture of final products exported. As per Notification 13/81 -Cus. and 53/97 -Cus. governing procurement of capital goods under EOU scheme, the exemption availed on capital goods was not liable to be recovered if the same were installed or otherwise put to use. We find that the capital goods in question have been confiscated vide the impugned order. As per Section 129E of the Customs Act, no pre -deposit is required in respect of the goods which are under the control of the Department to hear and dispose appeal impugning such order. We also note that the claim of the Assessee that after allowing depreciation admissible as per the CBEC circulars and the relevant notification, duty due, if any, on the capital goods worked out to only Rs. 14,443/ - is not without substance. In the circumstances the EOU has made a strong prima -facie case against the demand of entire exemption availed on the capital goods imported/indigenously procured.