RAMCO GRANITES LTD. Vs. COMMISSIONER OF CUSTOMS, BANGALORE

JUDGEMENT

(1.) THE appellant is a 100% E.O.U. Due to certain circumstances they have not fulfilled the export obligation after availing duty free procurement of capital goods and other raw materials. Moreover, they cleared the goods manufactured by them to the Domestic Tariff Area (DTA) without payment of duty. The Revenue proceeded against the appellants. The adjudicating authority demanded the duty of Rs. 8,61,280/ - on the goods removed to DTA under proviso to Section 3(1) of the Central Excise Act, 1944. He held that the capital goods valued at Rs. 32,49,350/ - procured under CT -3 under Notification No. 123/91 -Central Excise dated 2 -6 -81 are liable for confiscation. Therefore, he imposed a penalty of Rs. 3,00,000/ - under Rule 209A of the Central Excise Rules, 1944.

(2.) HE demanded the duty of Rs. 47,040/ - on the same goods against CT -3 under proviso to Section 11A of the Central Excise Act, 1944. He ordered confiscation of the unaccounted granite slabs under Rule 209A of the Central Excise Rules, 1944. He gave an option to the appellants to redeem the goods on payment of fine of Rs. 10,000/ -. The appellants admitted that they were not in a position to fulfil the export obligations. Hence, he confirmed the duty liability of the capital goods in view of the non -fulfilment of the conditions of Notification No. 123/91 -C.E. dated 2 -6 -81. The appellants are aggrieved over the following decisions : -

(3.) SHRI M.G. Varadarajan, learned Advocate appeared for the party and Shri L. Narasimha Murthy, learned SDR appeared for the Revenue. 4. The learned Advocate submitted that the appellants were not in a position to fulfil the export obligation in view of the various problems faced by them. The capital goods were obtained indigenously under CT -3 form without payment of duty. Once they are found that they would not be able to operate under the scheme, they applied to Government of India for withdrawal and the Govt. of India, vide order dated 4 -4 -96 permitted for withdrawal from the E.O.U. scheme. Moreover, they bonafidely believed that the import policy permitted them 25% of the export to DTA. It was pleaded that they are ready to pay the duty on the goods cleared in terms of Section 3(1) of the Central Excise Act. They also requested the cum -duty benefit in terms of the Apex Court decision in the case of Maruti Udyog Ltd. [2002 (141) E.L.T. 3 (S.C.) = 2002 (49) RLT 1]. Further, it was urged that the penalty under Central Excise Rules is not applicable for E.O.U. clearance as held in the following cases : -