The Chennai Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT), quashed notice against M/s. DCM Hyundai Ltd, the appellant and held that Circulars, though binding on the Department, is not so on the Tribunal.
The appellant earlier was a 100% EOU and De-Bonded as per Ex-Bond Bill of Entry dated 30.03.2007. They are engaged in the manufacture and export of ‘Marine Freight Container’ falling under chapter sub-heading No. 8609 of CETA,1985.
The appellant had applied for De-Bonding of the unit into DTA vand paid appropriate duties on the capital goods, imported raw materialsetc andit was noticed that certain raw materials were lying in stock beyond the warehousing period of three years as prescribed under Section 61 of the Customs Act, 1962.
The department was of the view that the duty paid on raw materials warehoused beyond the period of three years was liable to interest under Section 61 (2) (i) of Customs Act, 1962 at the rate of 15% per annum as per Notification No. 28/2002- Cus. (NT) dated 13.05.2002.
A Show Cause Notice was issued to the appellant under Section 28 of the Custom Act, 1962 proposing to demand an amount of Rs.10 lakhs as interest and also proposing to impose penalty under Section 117 of the Customs Act.
The Counsel for the appellant, J. Shankarraman, put forward mainly two contentions to assail the demand of interest. Firstly, that in terms of para 4 of CBEC Circular No. 10/2006 dated 14.10.2006 it is directed that no interest should be demanded on goods imported by 100% EOU. The second contention raised is that the SCN is time barred.
K. Komathi appeared and argued for the department. She submitted that at the time of request for debonding the appellant was informed about the requirement to pay interest on the duty paid in regard to stock of raw material stock lying in warehouse beyond the period of three years.
The Coram consisting of Sulekha Beevi CS, Judicial Member and Vasa Seshagiri Rao, Technical Member observed that “The request for waiver is filed as per the Board Circular. Circulars, though binding on the Department, is not so on the Tribunal. We have no hesitation to hold that the SCN is time barred.”
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to TaxscanAdFree. Follow us on Telegram for quick updates.
