2007 (10) TMI 464 - AT - Customs

Export Oriented Unit, 100% EOU - Bonded warehouse - Appeal against letters - Departmental communication

Summary

Issues:
1. Interpretation of legal agreement conditions for availing duty exemptions.
2. Appeal against the dismissal of appeal by Commissioner (Appeals) on grounds of appealability.

Analysis:

1. The appellants, engaged in IT consultancy for MNCs, obtained a 100% EOU status. The legal agreement they entered into required compliance with conditions for duty exemptions under Customs and Excise Notifications. The Dy. Commissioner informed them of the mandatory requirement for a Customs Bonded Warehouse license, which the appellants did not apply for. The Commissioner (Appeals) dismissed their appeal, stating the communication was not appealable. However, the Tribunal found this dismissal erroneous, as the appellants' status as EOU was subject to fulfilling exemption conditions, which they claim they did not avail. The Tribunal noted a vital legal point raised by the appellants and remanded the matter for further consideration by the Commissioner (Appeals).

2. The appellants argued that the Central Excise authorities' insistence on a Customs Bonded Warehouse license led to the Development Commissioner issuing a Show Cause Notice for alleged wrongful Income Tax benefits availed by the appellants. The Tribunal acknowledged the direct impact on the appellants' rights due to the communication from the Dy. Commissioner. The Tribunal held that the appellants were rightfully aggrieved, and the Commissioner (Appeals) should have admitted the appeal for a decision on merits. Consequently, the Tribunal set aside the impugned order and allowed the appeal for remand, directing a fair hearing for the appellants.

In conclusion, the Tribunal found errors in the dismissal of the appeal by the Commissioner (Appeals) and remanded the case for a thorough review based on the legal agreement's conditions and the appellants' claims regarding duty exemptions and Income Tax benefits. The judgment emphasized the need for a fair hearing and proper consideration of the appellants' grievances in light of the legal requirements and implications of the communication from the Dy. Commissioner.