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Issues:
Import of oil well equipment under EXIM Policy 2002-07, execution of re-export bond, imposition of redemption fine and penalty. Analysis: The appellant imported oil well equipment in 2005 and executed a re-export bond as per para 2.21 of the EXIM Policy 2002-07, committing to re-export the goods within six months of contract completion. However, the appellant failed to re-export the equipment, leading to the imposition of redemption fine and penalty. The appellant challenged this imposition, arguing that the imported equipment was second-hand capital goods covered under para 2.17 of the Exim Policy, making them freely importable without the need for a bond. The appellant contended that full duty was paid on the equipment without availing any exemptions, and since the bond was not required for such goods, the failure to re-export did not violate the Foreign Trade Policy or Customs Act. The dispute centered on whether the appellant's failure to re-export the equipment warranted the imposition of redemption fine and penalty. The appellant's advocate emphasized that the equipment was second-hand capital goods imported with full duty payment and no exemption benefits, as per para 2.17 of the Foreign Trade Policy 2002-07, which did not mandate a re-export bond for such goods. The advocate argued that since the bond was unnecessary, the failure to re-export should not lead to penalties. In contrast, the Departmental Representative contended that the appellant voluntarily executed the re-export bond and subsequently failed to fulfill its conditions, justifying the imposition of fines and penalties. After considering both arguments, the tribunal found that the imported equipment was indeed second-hand capital goods subject to full duty payment without any exemption benefits, aligning with para 2.17 of the Foreign Trade Policy. Since the appellant need not have executed the bond for such goods, the failure to re-export did not contravene the policy or Customs Act. Consequently, the tribunal ruled that the imposition of redemption fine and penalty lacked merit, setting aside the lower authority's decision and allowing the appeal in favor of the appellant.
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