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Issues:
Importation of old and used Oil Well equipments under Notification No. 21/2002, Sr. No. 217. Fulfillment of conditions for import under para 2.21 of the EXIM Policy 2002-07. Submission of Essentiality Certificate from Directorate General of Hydrocarbons. Duty demand, confiscation of equipments, redemption fine, and penalty imposed. Export of goods to SEZ Vishakhapatnam as fulfillment of re-export obligation. Applicability of SEZ Act, 2005 in determining export fulfillment. Analysis: The case involved the importation of old and used Oil Well equipments by the appellants under Notification No. 21/2002, Sr. No. 217, subject to fulfilling conditions under para 2.21 of the EXIM Policy 2002-07. The appellants submitted an Essentiality Certificate from Directorate General of Hydrocarbons as required. However, a show-cause notice was issued, leading to a duty demand of Rs. 18,03,661/-, confiscation of equipments, imposition of a redemption fine of Rs. 10 lakhs, and a penalty of Rs. 5 lakhs. The appellants argued that they fulfilled all conditions for import under Sr. No. 217 of the Notification, including producing the required certificate from Directorate General of Hydrocarbons. They contended that the goods were covered under para 2.17 and 2.21 of the Foreign Trade Policy 2004-09, permitting import of second-hand capital goods for export on execution of a Bond. The appellants claimed that their export of the goods to SEZ Vishakhapatnam fulfilled the obligation of re-export, citing provisions of the SEZ Act, 2005, and Sections 51 and 52 of the Act. The respondent, on the other hand, argued that the export to SEZ Vishakhapatnam did not qualify as export, as no foreign exchange was received. They contended that the import was made under the Customs Act, 1962, making the definition of export under the SEZ Act inapplicable. Upon considering the submissions, the Tribunal found that the import was made under para 2.21 of the Foreign Trade Policy, with an obligation to re-export. The Tribunal noted the provisions of Section 51 of the SEZ Act, stating that the Act overrides other laws, and the definition of export under the SEZ Act. The Tribunal concluded that the export to SEZ Vishakhapatnam fulfilled the re-export obligation, prima facie. Considering the strong case made by the appellants based on the SEZ Act provisions, the Tribunal waived the pre-deposit requirement and granted an unconditional stay during the appeal's pendency.
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