Decided on August 24,2015

C.C., Indore Appellant
C.T. Cotton Yarn Ltd. Respondents


SULEKHA BEEVI C.S.,MEMBER (J) - (1.)THE Appeal No. 163/2007 is filed by Revenue challenging the impugned order whereas in appeal No. 224/2007 the assessee is in appeal challenging the very same order. For convenience the parties are referred to the status of assessee and department hereafter.
At the outset, it needs mention that this Tribunal vide interim order dated 22.6.2007 had directed to deposit the duty demand within a period of 6 weeks from the date of order and report compliance on 2.8.2007. The assessee challenged this order before the Hon'ble High Court of Madhya Pradesh and the Hon'ble Court vide order dated 2.8.2007 in W.P. 3537/2007 passed interim order directing that the appeal filed before the Tribunal shall not be dismissed for non -depositing of the amount as directed vide order of Tribunal dated 22.6.2007. The case has been since pending before this Tribunal. Though several notice were issued the assessee or counsel has not turned up. It is seen that notices by registered post with A/D have been issued to the assessee by marking copy to the counsel informing the hearing dates as 5.8.2015, 17.12.2014, 25.3.2014, 13.2.2014, 19.11.2013, 01.10.2013, 11.4.2013, 11.2.2013, 28.9.2012, 11.7.2012, 15.5.2012, 27.3.2012, 07.2.2011, 8.9.2011, 26.7.2011, 21.4.2011, 23.2.2011, 02.11.2010, 5.10.2010, 11.8.2010, 18.6.2010, 3.5.2010, 11.01.2010, 11.9.2009. But these notices were returned with endorsement that factory closed. Notice was then directed to be issued to the assessee through the Department vide letter dated 11.5.2012 the Superintendent of Central Excise, Range -X, Malanpur has informed that there was no one available at the assessee factory site to serve the notice and therefore the hearing notice was affixed on the gate of factory in the presence of Panchnama. On 11.4.2013 this Tribunal issued miscellaneous order directing the registry to get information from the High Court of Madhya Pradesh as to what is the status of the case pending before the High Court Reply was received stating that the same is pending before the High Court. Thereafter the case has come up for Regular Hearing several times has been adjourned and notices repeated to the assessee. The matter thus came up on 5.8.2015 also when none appeared for the assessee and the learned DR brought to our notice the interim order passed by the Hon'ble High Court on 08.4.2015 and also order passed on 13.5.2015.

(2.)ON perusal of records and considering the fact that all possible ways to effect service of notice to the assessee has been exhausted we are of the opinion that no purpose will be served by keeping the appeal pending on the file of this Tribunal. Further by order of the Hon'ble Court dated 08.4.2015 the Tribunal is directed to consider and decide the appeal on merits. The order was brought to out notice by Department only on 5.8.2015, by producing a photocopy. The certified copy of the order of the Hon'ble Court is not produced. None has appeared for the assessee.
It is seen that the Hon'ble Court had directed the Tribunal not to dismiss the matter for non -deposit of the amount as per interim order passed by the Tribunal on 22.6.2007. There is no stay in disposing the appeal on merits. This is clarified by subsequent orders dated 8.4.2015 and 13.5.2015. What is stayed is the dismissal of the appeal under Section 35F of the Central Excise Act, 1944 for non -compliance of direction of pre -deposit during the pendency of appeal. With this view we proceed to consider the appeal on merits.

(3.)THE issue that poses for consideration in this appeal is whether the assessee is liable to pay the customs duty of textile machinery imported by them in the year 1997 for use within their premises as a 100% EOU in terms of Notification No. dated 3.6.1997.
Brief facts of the case areas under:

The assessee who was engaged in manufacture of 100% cotton yarn, purchased textile machinery (Automatic Cone Winder) in 1997. Being a 100% EOU they were entitled for duty free import of capital goods under Notification No. dated 03.06.1997. This notification imposed conditions for availing duty exemption. Sub clause (a) and (b) of Clause 5 of the said notification states that such capital goods shall not be removed to any other place without permission from Department and such permission can be given on payment of Customs duty leviable on the depreciated value. The said Machine was purchased by assessee by availing a loan from M/s. Tata Finance Ltd. (TFL) under a Hire Purchase Agreement and the goods were used by assessee upto the year 2000. The assessee defaulted the installments, M/s. TFL approached Mumbai High Court for recovery of loan. In such recovery proceedings the machine was sold by Court Receiver in October 2001 and the same purchased by M/s. Vamptex Traders, Coimbatore. It is the departments case that assessee did not intimate them about the court proceedings initiated by M/s. TFL, or the removal of the goods by way of sale to M/s. Vamptex traders. When the department came to know about removal of goods investigation was conducted and separate Show Cause Notice were issued to the assessee, M/s. TFC and M/s. Vamptex Traders. Original authority passed order confirmed the duty demand of Rs. 33,65,344/ - against assessee. Penalty was not imposed on any of the noticees. The assessee filed appeal and vide impugned order the Commissioner (Appeals) taking into account that the machine was warehoused in the premises of the appellant till 31.5.1998 and removed in October, allowed deprecation for a period of 3 (three) years and 2 (two) quarters at the rate of 45% in terms of Board Circular F. No. 305/52/85 -FTT dated 15.4.1987. The duty liability upon the assessee was thus reduced to Rs. 18,50,939/ - as per the impugned order. The Revenue has filed the above appeal challenging the allowance of depreciation. The assessee has filed appeal challenging the levy of duty. Before parting with the narration of facts it would be necessary to state that in the impugned order the Commissioner (Appeals) has observed with the assessee may take appropriate steps, as may be necessary, to collect the duty payable from M/s. Vamptex traders so that the ultimate burden of duty does not fall on them. It is also worth to mention that the show cause notices issued to M/s. TFL and M/s. Vamptex traders was confined only to imposition of penalty under Section 17 of Customs Act, 1962, whereas only the assessee was called upon to show cause as to why customs duty on the machine should not be demanded.


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