DEWAN RUBBER INDUSTRIES LTD. Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) All these five appeals, filed by M/s. Dewan Rubber Industries and Others, have been filed against a common Order -in -Original No. 22/2001, dated 16 -3 -2001 by which the Commissioner has confirmed the Customs duty on the Hydraulic Drive System (HDS) removed by the Appellants No. 1 from their 100% EOU premises to another premises of M/s. Dewan Sugars Ltd., Appellants No. 2, and imposed penalties on all the Appellants, besides confiscating the HDS with an option to redeem the same on payment of fine.

(2.) Shri L.P. Asthana, learned Advocate, submitted that M/s. Dewan Rubber Industries, Appellants No. 1 a 100% Export Oriented Undertaking (EOU) manufacture bicycle tyres and tubes since March, 1993 and they are exporting these goods since April, 1994; that they imported an hydraulic drive system (HDS) under Bill of Entry dated 17 -4 -1996 for using the same for compression of various materials for the formation of tyres and tubes; that the said HDS was cleared without payment of duty availing the exemption under Notification No. 13/81 -Cus., dated 9 -2 -1981; that they used the HDS for a number of years in their production process; that as in the beginning of 1999, the machine developed certain technical faults, the same was shifted to M/s. Dewan Sugar Ltd., Moradabad, their sister concern for the purpose of repair and reconditioning so as to make it operational and fit for use; that Dewan Sugars Ltd. have ample facilities for undertaking repairs and technical staff. The learned Advocate mentioned that they are not disputing their liability to pay the duty on the impugned goods; that the duty, however, should be assessed on the depreciated value of the HDS; that subsequent to the seizure of the HDS, the Appellants No. 1 had requested for permission to sell the same in Domestic Tariff Area (DTA) as per paragraph 9.18 of the Export -Import Policy; that the Development Commissioner, Noida Export Processing Zone (NEPZ) granted the permission on 8 -10 -1999 subject to the condition that they deposit applicable Customs and Excise duties; that in terms of Paragraphs 9.18 and 9.19 of the Policy also, the capital goods can be disposed of subject to payment of applicable duties on the depreciated value; that the appropriate duty may be calculated in terms of Notification No. 13/81 -Cus. after allowing depreciation on the import value.

(3.) The learned Advocate, further, submitted that they are not liable to pay any interest since the impugned hydraulic drive system was imported in April, 1996, prior to the date on which Section 28AB of the Customs Act was brought into force; that similarly, the provisions of Section 114A of the Customs Act will not be applicable for imposition of penalty since the import was made prior to coming into force of Section 114A of the Act.