Case Law Details
Lonsen Kiri Chemical Industries Limited Vs Commissioner of Central Excise & ST (CESTAT Ahmedabad)
In the present case, the assessee being 100% EOU, imported goods exempted under Notification No. 50/2003-Cus. There is no dispute about the intention of the said goods to be used in the manufacture of final product in the 100% EOU unit of the appellant. Section 61(1) of Customs Act, 1962 does not provide that goods should be used in the manufacture but it only requires that the goods imported with intention of use in 100% EOU. As regards the intention for use, it is not disputed. Therefore, appellants clearances falls under Section 61(1)(aa), according to which the interest provisions provided under sub-Section (2)(i) shall apply, which provides that interest to be charged only after expiry of three years till the date of payment of duty. The appellant have discharged the customs duty along with interest beyond three years till the date of payment. Therefore, as per statutory provisions, as discussed above under Section 61, the demand of interest over and above the interest paid by the appellant is not sustainable.
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
The brief facts of the case are that appellant is 100% EOU, imported certain raw materials and warehoused the same in 100% EOU. Since the goods could not be used in the manufacture, they cleared after four years. At the time of clearance, the appellant had paid customs duty and also paid interest after the period of three years of bonding. The case of the department is that appellant is required to pay interest after expiry of 90 days in terms of Section 61 (2)(ii). The contention of the department is that since the appellant have not used the goods imported, it cannot be said that the same was intended for use by 100% EOU. Accordingly, the same is covered under Section 61(1)(b) and in terms of sub-Section 2(ii), the appellant is required to pay interest after expiry of 90 days. Learned Commissioner (Appeals) also upheld the demand of interest, hence the present appeal is filed.
2. Shri Anil Gidwani, learned Counsel appearing on behalf of the appellant submits that the appellant has imported goods under notification which is meant for 100% EOU and the goods were intended for the purpose of manufacture of final product by EOU. Since the same could not be used and cleared on payment of Customs duty, interest is payable only after three years of bonding period as prescribed under Section 61(2)(i). He also placed reliance on the decision in the case of Sun Pharmaceuticals Industries Limited vs. CCE & ST, Vadodara – 2016 (335) ELT 188 (Tri. Ahmd.).
Please become a Premium member. If you are already a Premium member, login here to access the full content.
