EOU can be liable to duty only on non-achieved portion of NFE.

PJ/Case Laws/2012-13/1513

Case:- COMMISSIONER OF CUSTOMS, BANGLORE V/s NATURAL STONE EXPORTS LTD.

Citation:- 2013 (288) E.L.T. 341 (Kar.)

Brief Facts:-The revenue has preferred this appeal challenging the order passed by the Tribunal [2006 (198) E.L.T. 440 (Tribunal)] which has held that the assessee is liable to pay Customs duty only in respect of the goods imported but not exported and also against the order remanding the matter to the Original Authority to quantify the duty on the goods other than the capital goods which are imported indigenously procured duty free but not utilized in the manufacture of articles for export.

Reasoning of Judgment:- After being carefully considered the submissions that The material on record discloses that the assessee which is a 100% EOU has achieved 64% of NFE on goods other than capital goods (raw materials, consumables, etc.,) which are not utilized in the manufacture of articles for export is definitely liable for appropriate duty. To the extent the assessee has achieved export, no duty is leviable. Therefore, the Assessing Authority was not justified in levying duty on 100% of the goods which is imported. This position is also clear from the Circular No. 12/2008, dated 24-7-2008 issued by the Central Board of Excise and Customs, New Delhi, where it has been explained that in case the unit has not achieved positive NFE, the duty foregone at the time of import shall be paid on such value of goods in proportion to the non-achieved portion of NFE. Therefore, the finding recorded by the Tribunal is in consonance with the aforesaid circular and in accordance with law and that cannot be found fault with. Since the adjudicating order has treated both the capital goods and other goods on the same footing, the Tribunal was justified in remanding the case to the Original Authority for quantification of duty on the goods other than capital goods which are imported/indigenously procured duty free but not utilized in the manufacture of articles for export. In these circumstances, the Tribunal was justified in setting aside the order imposing penalty also. Therefore, we do not see any merit in this appeal. Accordingly, it is dismissed.

Decision:-Appeal dismissed.

Comment:- The analogy drawn from this case is that when EOU has not been able to achieve 100% NFE on the goods imported/indigenously procured duty free, it is liable to pay duty only on proportionate basis and not on all the goods imported duty free.

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PJ/Case Laws/2012-13/1513

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