2012 (9) TMI 206 - AT - Customs

Withdrawal of permission - Export Processing Zone import of used diesel engines for the purpose of re-construction and to export - subsequent permission granted was withdrawn by the Development Commissioner Held that - Withdrawal retrospectively is not permissible - sale in DTA on payment of duty based on the earlier permission granted to the Appellants, cannot be held to be in violation of the provisions of para 9.10(b). The term, Manufacture in the context of Exim Policy includes activities like re-construction and repair. - The concept of manufacture in the Central Excise law cannot be brought into for the purpose of 100% EOU Undertaking service activities. The finding of the Commissioner that the payment for DTA sale was not from EEFC Account, is clearly beyond the scope of the show cause notice

Summary

Issues:
Appeal against Commissioner's order on DTA sales eligibility and confiscation of goods.

Detailed Analysis:

1. Background and Allegations:
The Appellants imported used diesel engines for re-construction and DTA sales under a Letter of Permission (L.O.P.) granted by the Development Commissioner. A show cause notice alleged that the Appellants were not eligible for DTA sales under para 9.22 of the Exim Policy.

2. Appellant's Arguments:
The Advocate challenged the Commissioner's order on the grounds that specific permission was granted by the Development Commissioner for DTA sales, clarifying that DTA sales were not subject to licensing policy. The Advocate also highlighted a previous permission for DTA sales granted by the Development Commissioner, which was challenged in court and set aside, indicating that the Appellants' current clearance for DTA sales should not be confiscated.

3. Customs Authorities' Position:
The Department argued that DTA sales permission is subject to licensing policy and as the Appellants did not produce the necessary license, the goods were liable for confiscation. Additionally, they claimed that payments were not made in EEFC Accounts as required.

4. Tribunal's Decision:
After considering both sides' submissions and reviewing the records, the Tribunal found in favor of the Appellants. They noted that the permission for DTA sales granted by the Development Commissioner was not subject to licensing restrictions as alleged. The Tribunal clarified that the concept of "manufacture" under the Exim Policy includes activities like re-construction and repair, which do not require EEFC Account payments. Importantly, the Tribunal emphasized that the clearance for DTA sales was based on specific permission granted by the Development Commissioner, not requiring an import license as per the Exim Policy.

5. Conclusion:
Consequently, the Tribunal set aside the Commissioner's order, allowing the appeal with consequential relief as per the law. The decision highlighted the importance of specific permissions granted by the Development Commissioner for DTA sales and clarified the scope of activities under the Exim Policy regarding re-construction and clearance procedures.

This detailed analysis encapsulates the key arguments, positions, and the Tribunal's decision in the legal judgment regarding the eligibility for DTA sales and confiscation of goods.