2006 (1) TMI 330 - AT - Customs

Summary

Issues:

1. Interpretation of Notification No. 53/97 dated 3-6-97 regarding duty-free procurement of photocopier machines for a 100% EOU.
2. Dispute over duty payment due to alleged non-utilization of photocopier machines within the factory premises.
3. Validity of demand for duty by the Revenue.
4. Applicability of de-bonding orders and duty payment requirements.
5. Consideration of relevant legal precedents and policies in determining duty liability.

Analysis:

1. The case involved the appellants, a 100% EOU, procuring duty-free photocopier machines under Notification No. 53/97. The Revenue alleged non-compliance with the notification's utilization requirements and demanded duty amounting to Rs. 30,491.

2. The advocate for the appellants argued that the goods were within the bonded area, making the duty demand premature. He highlighted that de-bonding orders had been obtained, and duty would be paid upon de-bonding as per legal requirements. The Revenue, represented by the SDR, maintained the validity of the duty demand due to the appellants' failure to adhere to the notification's conditions.

3. Upon careful review of the case records, it was noted that the Development Commissioner had permitted the disposal of unutilized indigenous capital goods, including a photocopier, into the domestic area on payment of applicable duties. Citing a relevant precedent, it was established that duty on goods in a warehouse could only be recovered upon the bond period's expiry. Given the permission to clear the goods for domestic area transfer on duty payment, the impugned order was set aside, requiring duty payment upon clearance to the domestic tariff area.

4. The Tribunal's decision was influenced by the Development Commissioner's authorization for goods disposal and duty payment, aligning with the legal principle that duty is levied upon clearance to the domestic area. Consequently, the appeal was allowed, providing consequential relief to the appellants for duty payment upon goods transfer to the domestic tariff area.

This detailed analysis of the judgment showcases the nuanced legal considerations and application of relevant statutes and precedents in resolving the issues raised in the case concerning duty-free procurement and utilization requirements for a 100% EOU.