The Ahmedabad bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that the permission to allow the destruction of duty-free textile machinery plant without authority to arbitrary abatement of leviable customs duty.
Sheena Textiles Limited, the respondent-assessee was engaged in the manufacture of cotton terry towels, bath mats, bath rugs, carpets, curtains, etc. falling under Chapter 63 of the Central Excise Tariff Act, 1985 and the respondent-assessee got approval for setting up a 100% Export Oriented Unit (EOU) from the Development Commissioner, Kandla.
The revenue appealed against the order passed by the Commissioner (Appeals) for dropping the proceedings initiated against the respondent-assessee of recovery of the Customs duty amounting to Rs. 4,43,48,014/- from them on the said used textile machinery and accessories and allowing the permission to re-export the duty-free textile machinery plant.
Prabhat K. Rameshwaram, the counsel for the revenue contended that since the impugned goods had been imported without payment of customs duty, the inherent value of the goods comprises the element of Customs duty therein and therefore permission of allowing the destruction of goods without the authority of customs law will amount to arbitrary abatement of leviable customs duty.
None appeared on behalf of the assessee and the bench observed that the order of re-export of duty free imported machinery provided by the impugned order-in-original was legally not tenable as the permission for the re-export of the goods could have been given by the concerned proper officer, had they followed the prescribed schedule as given in the exemption notification and requested re-export at the proper time.
The two-member bench comprising Ramesh Nair (Judicial) and C L Mahar (Technical) held that all the charges invoked in the show cause notice against the assessee are upheld on merits.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
