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Issues:
1. Interpretation of EXIM Policy regarding duty-free imports for trading units. 2. Allegations of wrongful import and transfer of goods by the Department. 3. Assessment of duty liability on goods cleared under into bond Bills of Entry. 4. Consideration of duty exemption for goods re-exported or transferred between bonded warehouses. 5. Decision on pre-deposit of duty pending appeal. Interpretation of EXIM Policy: The case involved a 100% Export Oriented Trading Unit engaged in in-bond service and trading activities of ophthalmic lenses. The Department alleged that the unit imported goods without payment of customs duty, wrongly claimed benefits under a specific notification, and transferred goods to another EOU, resulting in revenue loss. The Tribunal analyzed the EXIM Policy, noting that trading units were excluded from the EOU scheme under para 6.1. However, it found that the goods were cleared under into bond Bills of Entry, allowing duty-free deposit for importers, irrespective of subsequent clearance conditions or end-use classifications. Allegations of Wrongful Import and Transfer: The Department accused the unit of importing goods without duty payment and transferring them to another EOU in violation of the EXIM Policy. The Tribunal examined the situation and determined that the initial imports against into bond Bills of Entry, even by a 100% EOU trading unit, were permissible if goods were re-exported or transferred to a bonded warehouse for manufacturing and export. As the Department did not dispute these facts, the Tribunal concluded that the duty demand objection was not valid, akin to no customs duty payable on goods not imported into India. Assessment of Duty Liability on Goods Cleared under into Bond Bills of Entry: The Tribunal clarified that when goods are cleared under into bond Bills of Entry and remain in a customs bonded warehouse for re-export or transfer to another bonded warehouse, no duty can be demanded. It emphasized that duty exemption was not contingent on end-use notifications or EOU classifications for assessing duty liability. Bond-to-bond transfers did not necessitate duty exemption cover, and the Tribunal accepted the unit's explanation regarding re-export or transfer for manufacturing and export purposes. Consideration of Duty Exemption for Goods Re-exported or Transferred: Based on the factual position presented by the unit and undisputed by the Department, the Tribunal found that the unit had a strong case for waiving the pre-deposit of the demanded duty. It acknowledged the legitimate re-export or transfer activities undertaken by the unit, leading to the decision to dispense with the pre-deposit of the duty amount pending the appeal's disposal. Decision on Pre-deposit of Duty Pending Appeal: Ultimately, the Tribunal pronounced a decision in court, granting the unit a complete waiver of the pre-deposit of the duty amount of Rs. 5,38,267 and stayed the recovery pending the appeal's resolution. This decision was based on the unit's compliance with duty-free deposit provisions for goods cleared under into bond Bills of Entry and its legitimate re-export or transfer activities within bonded warehouses.
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