2013 (12) TMI 520 - AT - Customs

Import of HSD oil - Exemption under Notification 52/03-Cus dated 31-03-03 - appellants filed a Bill of Entry for Warehousing the goods - Demand of additional duty - Held that - The entire premises of a 100% EOU has to be treated as a warehouse if the licence granted under Section 58 to the unit is in respect of the en tire premises. - Imported goods warehoused in the premises of a 100% EOU (which is licensed as a Customs bonded warehouse) and used for the purpose of manufacturing in bond as authorized under Section 65 of the Customs Act, 1962, cannot be treated to have been removed for home consumption - Decided against Revenue.

Summary

Issues:
1. Whether the exemption claimed under Notification 52/03-Cus for imported High Diesel Oil by a Hundred Percent Export Oriented Unit (EOU) extends to additional duty under section 116 of the Finance Act, 1999.
2. Whether the duty liability arises at the time of import and if the goods can be assessed under a warehousing Bill of Entry with no liability to customs duty.
3. The applicability of Section 58 of the Customs Act, 1962 and Section 2(14) of the Customs Act in the context of depositing imported dutiable goods in a bonded warehouse of a Hundred Percent EOU.

Analysis:
1. The Respondent, a Hundred Percent EOU, imported High Diesel Oil and claimed exemption under Notification 52/03-Cus. The Revenue contended that the exemption did not cover the additional duty under the Finance Act, 1999. The Commissioner (Appeal) held that as the goods were not removed from the customs bonded warehouse and were captively consumed, no liability arose. The Tribunal relied on previous decisions favoring the appellants and rejected the Revenue's appeal based on the principle established in Paras Fab International case.

2. The Revenue argued that duty liability arises at the time of import and the goods cannot be assessed under a warehousing Bill of Entry without liability to customs duty. The Respondent cited precedents in their favor, emphasizing that the duty demand was not sustainable based on previous decisions supporting the appellants' position.

3. The Tribunal highlighted the provisions of Section 58 of the Customs Act, 1962, which allows dutiable goods to be deposited in a warehouse licensed under the Act. The lack of clarity regarding the necessity of an exemption notification for depositing imported dutiable goods in a bonded warehouse of a Hundred Percent EOU was noted. However, this specific issue was not extensively argued in the case.

In conclusion, the Tribunal rejected the Revenue's appeal, relying on the precedent set by the Larger Bench in Paras Fab International case. The judgment emphasized the consistent application of legal principles in similar cases and upheld the decision in favor of the Hundred Percent EOU regarding the exemption claimed under Notification 52/03-Cus for the imported goods.