H!GH COURT OF CHHATTISGARH^AT BILASPUR Tax Case (Central Excise Appeal) N0.12 of 2006 APPELLANT: iWs Uniworth Limited (Formeriy known as Woolworth (India) Ltd.) 923-945, Urla Industrial Area, Sarora, Raipur, Through its G.M. (Commercial) Shri A.P. Khetan Versus RESPONDENT: Commissioner, Customs Central Exclse, Central Revenue Building, Tikrapara, Raipur Present: Shri Brijesh Mishra with Shri C.R. Sahu, counsel for the appeliant. Shri Bhishma h3nger, counsel for respondent. Division Bench: Hon'ble Shri Dhirendra Mishra (3-11-2009) The foilowing judgment of the Court was detlvered by 1 The appellant has preferred this appeai under Section 35-G of the Central Excise Act, 1944 (for short the Act') against the impugned order dated 10-3-2006 passed by the Customs, Central Excise and Service Tax Appellate Tribunai (for short 'the Tribunal') in Appeat No.E/354/03-NBfSM) whereby the appeal preferred by the appellant against the original order dated 1-3-2002 passed by the Commissioner, Customs & Central Excise, Raipur (for short 'the Commissioner') has been dismissed, on substantial questions of law set in paragraph-1 2 of _ihej7iemo ofappeal. 2. Briefly stated facts of the case, as given in para-2 of the impugned order, arethat the appellant is registered as 10)% Export Oriented Unlt (for short 'EOU') and procured certain goods without payment of duty under Notification No.123/81-CE. On 5-9-®6,offlcere of the Revenue visited the factory premises of the appetlant and it was found that certain goods which were received without payment of duty after availing the benefit of Notification No.123/81-CE were shifted to other places outside the premises of EOU. The adjudicating authority after issuance of show cause notice confiscated the goods and confirmed the demand. The adjudicating authority altowed the release of the goods on payment of redemption fine of Rs.10 lakhs and personal penaity was also imposed on the appeliant. The appeal preferred by the appellant has been dismissed by the Tribunal by impugned orrfer. 3. Shri Brijesh Mishra with Shri C.R. Sahu, iearned counsel for the appeiiant argued that the capital goods were brought into the appellant's EOU premises by strictly foliowirg the terms and condttions of the exemption notlfication. The same were shifted to the adjacent premises, temporarily, owing to certain practicat dlfficulties being Taced by the appellant during trial run of the said capital goods. Shifting of the capital goods was within the knowledge of the respondent department, as has been observed in para-9 of the order passed by tearned Commissioner. Shifted capital goods were being utilized for manufacturing of the products which were solely meant for export purposes. There is no allegation to the effect that the CTpital goods were being used by the appetlant to manufacture the goods whicft were being, in turn, sotd In DTA. Thus, there is only technical and fe; ti •"ssaa s? T^-. "^sww"" ^!SsJ—-rf procedural lapses on the part of the appteltant and the same did not warrant confiscation of the machineries and imposition of penalty. Adjacent plot to whteh capital goods were shifted is part and parcel of the same land for which licsnce to manufacture under Section 65 of the Act was given to the appellant and the same cannot be termed as de- bonding and the capital goods remained al! alone in the possession and controi of the appellant. It was never transferred or sold to any other person. 4. Heard leamed counsel for the appellant. Perosed the order passed by the Commissioner (Annexure-A/13) and the impugned 'oider (Annexure-A/1) whereby the order passed by the Commissioner has been confirmed. 5. It appears that the appellant was served with a show cause notice dated 3-9-97 by the Commissloner. The appellant replied to the show cause notice and submitted that capital goods machineries were mearrt for silk division established on the same land. Silk division was totally exempted from the excise duty. Due to somepractical difficulties faced during trial mn of the machlneries, they were temporarily taken to the adjacent Silk Division soiely and exclusivety for the purpose of carrying out the required experiments/trials for manufacturing of silk based export products of their 100% EOU. This faet was very well kncwvn to the officers of the department. The appellant neither sold nor transferred the machine to any other person and contlnued to possess the same. 6 From the order, it also appears that the appellant was afforded an opportunity of personai hearlng by the Commisstoner, however, the appellant vide his reply to the above noti^e stated that they have already submitted their stand in reply to the show cause nottee and they have nothing to add. They also stated that they regretted for their mlstake as they were new to the set up 100% EOU at the initial stage. 7. The Commissioner held that the noticee have contravened the provisions contained in the Notification dated 2-6-81 as amended presently vide Notification No.136/94-CE dated 1-11-94. They have transferred indigenous machines received wlthout paymert of Central Excise duty under 100% EOU scheme In terms of No.123/81-CE to their Silk Division (DTA) for use in manufacture of Silk Yarn without following the procedure and without payment of amount equal to the excise duty leviabte on such goods on the depreclated value thereof at the rate tn force on the date of payment of such as provided in Notification No.136/94-CE dated 10-11-94. They also failed to obtain necessary permlssion from the Development Commissioner and to get such items/goods debonded after intimattng and taking prior permission of the Centrat Excise Department and to pay Central Excise duty so determined by the Cerrtral Excise Department. They did not follow the procedure in this regard and had not brought the fact of their shlfling the said goods/items fromtheir Wool Divlsion (100% EOU) to Stlk Divfsion, DTA to the knowledge of the Centrat Excise Department. This was accepted by the Noticee In para-8 of reply to show cause nottee dated 30-6-98. Hence the entire goods as detailed in Annexure-A and Annexure-B to the show cause notice are liable for confiscation under Rule 173-Q of the Central Excise Rules, 1944 and accordingly, the goods detailed in Annexure-A .s-ss-'? i/£^ and Annexure-B other than air conditFipner were ordered to be confiscated with an option to redeem the same on payment of redemption fine of Rs.10 lakhs. The demand of Rs.6,09,295/- under Rule 9(2) read with Section 11-A of the Central Excise Act 1944 was confirmed. However, the amount confirmed was directed to be adjusted against the duty already paid by the appellant. A penalty of Rs.1 lakh was imposed under Ruie173-Q. 8 The above order has been subsequently confinned by the Tribunal wth observation that the appellants are admitting question which are procured without the fact that the goods of duty under Notification are removed from outside EOU and are being used in manufacture of goods outside EOU. 9. !n view of the concurrent finding of facts recorded by the Commissioner and subsequently confirmed by the Tribunat that the capital goods in question procured without payment of duty under Notifieation No.123/81-CE were removed outside of EOU and were being used in manufacture of goods outside of EOU and the above finding is based on admission of the appellant, we are of the opinion that there is no infirmity or illegality in the impugned order and no substantial questlon of law as proposed in para-12 of the memo of appeal arises for adjudication of this appeal. 10. The appeal being devoid of substance deserves to be and is hereby dismissed. Sd/- Dhirendra Mishra Judge Bawe SA'- R.N. Chandrakar Judge