Judgment:
1. M/s. Infosys Technologies Ltd., a 100% EOU had been issued with a Private Bonded Warehousing licence under the Provisions of the Customs Act for development of exports of computers and software. They claimed the benefit of Notification 140/90, dated 22-10-90 as amended which was granted on BE filed by them on 5-6-96. A show cause notice was issued as it appeared that EPABX system imported vide this Bill of Entry dated 5-6-96 (and not 5-6-97 as incorrectly mentioned in the show cause notice) did not merit classification in the category of the goods specified in the table to the Notification, as the item was used for communication between persons and not related to development of software. The Commissioner (Appeals) vide the order impugned before us has found as follows: "I have carefully considered the appeal memorandum and the submissions made at the time of personal hearing. The appeal herein addresses the issue of eligibility to the benefit of customs duty exemption under Notification 140/81 as well as the operation of time bar. Taking the time bar issue first, I find that the bill of entry in this case was filed on 5-6-96 (not 5-6-97 as stated in the order in original). If the department had allowed clearance of the EPABX equipment without payment of duty in terms of Notification 140/81 as claimed by the appellant, the assessment of the goods in question was therefore completed with reference to this date and the clearance was given on 14-6-96. The SCN demanding differential duty on the basis of non eligibility to the exemption Notification was issued on 8-9-97 i.e. much after the expiry of 6 months from the date of clearance 14-6-96. Hence the SCN/demand is hit by time bar.
Therefore, without going into the merits of the case, on this ground alone, I set aside the order of the original authority and allow the appeal with consequential relief." (1) The bill of entry in this case was into bond Bill of Entry; assessment on such bills of entry were not final in terms of Sections 15 & 28 of the Customs Act, 1962 and therefore, the demand confirmed by the Original Authority should be held to be correct.M/S. J.K. Synthetics Ltd, v. CC, Jaipur 2. After hearing both sides and considering the matter, it appears that the issue of demand in this case for goods which are cleared to be placed in the bonded warehouse and used or unused. Goods cleared into Bond and placed in a Warehouse cannot be charged to duty. Duty is to be recovered on them only on expiry of Bond Period. As regards the use of the subject goods in the warehouse, permissible or otherwise we have no assistance of the findings on that aspect in the orders of the Commissioner (Appeals). It is found that the levy of duty on goods in a warehouse of an EOU, the Supreme Court in the case of Siv Industries Ltd. [2000 (117) E.L.T. 281] had held as follows : "24..........On the satisfaction of the Board of Approvals, EOU may be debonded on its inability to achieve export obligations, value addition or other requirements. Such debonding is subject to such penalty as may be imposed and levy of the following duties :- (a) Customs duty on capital goods at depreciated value but at rates prevalent on the dates of import; (b) Customs duty on unused raw materials and components on the , value on the dates of import and at rates in force on the dates of clearance." Therefore duty and penalties if any and the application of the notification, will have to be considered on the date of debonding i.e.
expiry of prescribed Bond Period. The present demands issued are therefore premature. The question of levy of duty, on the EPABX, if any, has to be determined in terms of the Apex Court ruling only at the time of debonding.
3. In view of our findings, we do not find any material in the present appeal to uphold. The same is required to be dismissed.