2010 (5) TMI 860 - AT - Customs

Summary

Issues involved: The judgment involves issues related to the import of capital goods under the EPCG Scheme, compliance with Notification No. 29/97-Cus, conversion of duty schemes, retrospective effect of licensing authority's orders, and the benefit of policy changes.

Import of Capital Goods under EPCG Scheme:
The appellant imported capital goods and spares under the EPCG Scheme, opting for the 0% duty EPCG Scheme. They were required to export finished goods worth six times the value of the imported capital goods within eight years. However, they failed to meet the minimum value of imports within the stipulated period, leading to show-cause notices for recovery of duties and penalties.

Conversion of Duty Schemes and Compliance with Notifications:
The appellant applied for conversion from the 0% duty EPCG Scheme to the 10% duty EPCG Scheme, which was allowed by the licensing authority. The Customs authorities contested this conversion, leading to a Larger Bench referral on the powers of the DGFT to amend licenses retrospectively. The Larger Bench concluded that licensing authorities cannot amend licenses retrospectively, and Customs authorities cannot challenge such amendments.

Benefit of Policy Changes and Special Additional Duty:
The appellant claimed the benefit of a policy change under Notification No. 122/99-Cus, allowing importers of capital goods to claim the 0% duty benefit if imports were worth Rs 1 crore or above. Additionally, they argued against the recovery of Special Additional Duty (SAD) due to the omission of Section 3A from the Customs Tariff Act without a saving clause.

Decision and Remand:
The Tribunal set aside the impugned orders and remanded the case to the Commissioners of Customs for reconsideration. The appellant was granted the opportunity to raise the alternative plea and address issues related to SAD. All ancillary issues, including confiscation, redemption fines, and penalties, were to be reviewed by the lower authorities.