2018 (2) TMI 1956 - AT - Customs

100% EOU - duty free import - benefit of N/N. 52/2003 Cus. dated 31.03.2003 - import of various capital goods without payment of duty and bonded the same in their private bonded premises - HELD THAT - It appears that the appellant s entitlement to duty free import of various goods under N/N. 52/2003 Cus. dated 31.03.2003 has not properly examined by the lower authorities. When it is so, we set aside the impugned order and remand the case to the Original Authority in the light of the above decisions but after providing an opportunity to the appellant to present their case. Appeal allowed by way of remand.

Summary

Issues:
1. Duty free import of various capital goods by STPI Unit under EOU scheme.
2. Dispute regarding specific items imported without payment of duty.
3. Adjudication confirming demand for certain items while allowing benefit for others.
4. Appeal against Order-in-Original No. 14/2008 dated 28.08.2008.

Issue 1: Duty free import of various capital goods by STPI Unit under EOU scheme

The appellant, a STPI Unit operating under the 100% EOU scheme, imported capital goods without paying duty for software development activities aimed at export. The dispute arose concerning the duty-free import of specific items like Fire Smoke Detector Systems, AC Leakage Detector, Smoke Detector, Wall Systems, Aluminum Honeycomb Panels, and Conductive Tiles during the period from January 2002 to September 2005.

Issue 2: Dispute regarding specific items imported without payment of duty

The Department issued a show-cause notice after conducting inquiries, leading to the impugned order which allowed duty-free import for Fire Smoke Detector and Fire Safety Equipment but demanded duty payment for other items. The appellant contested this decision by filing the present appeal.

Issue 3: Adjudication confirming demand for certain items while allowing benefit for others

During the hearing, the appellant's counsel argued that all disputed items were utilized for software development activities for export. The appellant relied on precedents such as CC, Pune Vs. Cognizant Technology Solutions Pvt. Ltd., CC, Bangalore V. Microsoft India (R&D) Pvt. Ltd., and DSL Software Ltd. V. CC. After reviewing the submissions and records, the Tribunal found that the lower authorities did not adequately examine the appellant's entitlement to duty-free import under Notification No. 52/2003 Cus. dated 31.03.2003. Consequently, the impugned order was set aside, and the case was remanded to the Original Authority for reevaluation in light of the mentioned decisions.

Issue 4: Appeal against Order-in-Original No. 14/2008 dated 28.08.2008

The appeal was filed against Order-in-Original No. 14/2008 dated 28.08.2008, challenging the decision that demanded duty payment for certain imported items while allowing duty-free import for others. The Tribunal's decision to remand the case for further examination by the Original Authority was based on the lack of proper scrutiny of the appellant's entitlement to duty-free import under the relevant notification.

This detailed analysis of the judgment highlights the key issues involved in the case and the Tribunal's decision to remand the matter for further consideration based on the appellant's entitlement to duty-free import under the EOU scheme.