D.K. Polyn Industries and ors. Vs. Commissioner of Central Excise - Court Judgment

Excerpt:
1. vide his impunged order commissioner, surat has confirmed demand of rs. 61,12,328/- against polyn industries as customs duty under the provisions of section 28 of custom act, 1962 along with imposition of personal penalty of identical amount under section 72 read with section 114-a of customs act, 1962. in addition personal penalties of varying amounts has been imposed upon other appellants under section 112-(b) of customs act, 1962.2. the appellant m/s. d.k. polyn industries is 100% eou. on checking the stock position of processed yarn during the visit of officers from the central excise & customs (preventive) to the appellant's factory on 23.10.99, the same was found to be short by 1 lakhs kgs. statements of partner as also other persons were recorded and it was believed that the goods in question have been sold without the cover of invoices and without discharging the duty burden. accordingly, show cause notices were issued proposing confirmation of demand of customs duty as also imposition of personal penalty on various persons, which culminated into impugned order.3. shri mayur shroff, ld. advocate appearing on behalf of appellants has challenged the impugned order on the sole ground that the appellants, though 100% eou, was not required to discharge any customs duty in-respect of clearances made in the domestic tariff area and, they were required td pay the duty of excise. as such confirmation of payment of customs duty against the appellant was not justified in view of the law laid down by the larger bench of the tribunal, in the case of vikram ispat and anr. v. cce - 2000 (40) rlt 205 (cegat-l.b.). the said decision was subsequently followed by west zonal bench order no.c-11/836/wzb/2004 in the case of m/s. sarthi textiles v. cce, surat reported in 2004 (167) e.l.t.308 (tri. mumbai) wherein under identical acts and circumstances, confirmation of customs duty and penalty imposed on the assessee set aside. he also draws our attention to the decision in the case of harshvardhan exports v. cce reported in 2003 (157) e.l.t.680 (tri. mumbai).4. after hearing the ld. jdr appearing for the revenue, we find that the larger bench of the tribunal referred supra has held that the nature of the duty levied on goods removed from 100% eou is excise duty, whereas for determining the quantum of duty, the measure adopted is duty leviable under customs act. in other two decision refers supra, the tribunal has followed above decision and set aside the confirmation of customs duties in respect of clearances made from 100% eou to dta along with setting aside the personal penalties. we do not find any justifiable reasons to take a different view. accordingly, we set aside the order of lower authority and allow all the appeals with consequential relief, if any, to the appellants.

Judgment:
1. Vide his impunged order Commissioner, Surat has confirmed demand of Rs. 61,12,328/- against Polyn Industries as Customs duty under the provisions of Section 28 of Custom Act, 1962 along with imposition of personal penalty of identical amount under Section 72 read with Section 114-A of Customs Act, 1962. In addition personal penalties of varying amounts has been imposed upon other appellants under Section 112-(b) of Customs Act, 1962.

2. The appellant M/s. D.K. Polyn Industries is 100% EOU. On checking the stock position of processed yarn during the visit of officers from the Central Excise & Customs (Preventive) to the appellant's factory on 23.10.99, the same was found to be short by 1 lakhs Kgs. Statements of partner as also other persons were recorded and it was believed that the goods in question have been sold without the cover of invoices and without discharging the duty burden. Accordingly, show cause notices were issued proposing confirmation of demand of Customs duty as also imposition of personal penalty on various persons, which culminated into impugned order.

3. Shri Mayur Shroff, Ld. Advocate appearing on behalf of appellants has challenged the impugned order on the sole ground that the appellants, though 100% EOU, was not required to discharge any Customs duty in-respect of clearances made in the domestic tariff area and, they were required td pay the duty of excise. As such confirmation of payment of Customs duty against the appellant was not justified in view of the law laid down by the Larger Bench of the Tribunal, in the case of Vikram Ispat and Anr. v. CCE - 2000 (40) RLT 205 (CEGAT-L.B.). The said decision was subsequently followed by West Zonal Bench Order No.C-11/836/WZB/2004 in the case of M/s. Sarthi textiles v. CCE, Surat reported in 2004 (167) E.L.T.308 (Tri. Mumbai) wherein under identical acts and circumstances, confirmation of Customs duty and penalty imposed on the assessee set aside. He also draws our attention to the decision in the case of Harshvardhan Exports v. CCE reported in 2003 (157) E.L.T.680 (Tri. Mumbai).

4. After hearing the Ld. JDR appearing for the revenue, we find that the Larger Bench of the Tribunal referred supra has held that the nature of the duty levied on goods removed from 100% EOU is Excise duty, whereas for determining the quantum of duty, the measure adopted is duty leviable under Customs Act. In other two decision refers supra, the Tribunal has followed above decision and set aside the confirmation of Customs duties in respect of clearances made from 100% EOU to DTA along with setting aside the personal penalties. We do not find any justifiable reasons to take a different view. Accordingly, we set aside the order of lower authority and allow all the appeals with consequential relief, if any, to the appellants.