2009 (5) TMI 795 - AT - Central Excise

Summary

Issues:
- Interpretation of Foreign Trade Policy provisions regarding duty liability for defective goods in EOU Unit.

Analysis:
The case involved a dispute regarding the duty liability of an EOU Unit for defective goods procured under cover of CT-3. The Revenue demanded a pre-deposit of duty and penalty based on Para 6.15 of the Foreign Trade Policy. However, the learned Advocate argued that Para 6.15 was not applicable, and instead, Para 6.17(c) regarding the replacement or repair of defective goods should be considered. The Tribunal, after careful consideration, found that the Revenue had applied the wrong provision. The Tribunal held that the applicants had a strong case on merits and ordered a full waiver of the entire dues demanded in the impugned order. Additionally, the Tribunal directed that no coercive measures should be taken by the Revenue until the appeal is decided, and the stay order would continue even after 180 days.

This judgment highlights the importance of correctly interpreting and applying the relevant provisions of the Foreign Trade Policy in determining duty liability for defective goods in an EOU Unit. It underscores the significance of choosing the appropriate provision that aligns with the specific circumstances of the case, as demonstrated by the Tribunal's decision to rely on Para 6.17(c) instead of Para 6.15. The judgment emphasizes the need for a thorough analysis of the facts and legal framework to ensure a just and fair outcome in matters involving duty liability in specialized economic zones like EOU Units.