2018 (4) TMI 167 - AT - Customs

100% EOU - Refund of customs duty - expiry of warehouse period - case of appellant is that there was no requirement under law to pay duty as the goods would have been destroyed as per para 6.15(b) of the Foreign Trade Policy 2004-09 - Held that - the refund claim has only been rejected on the ground that warehousing period has been expired whereas the fact of the matter is the Customs licence granted to the appellant had been renewed and the goods were still in the bonded warehouse. Further, the claim for refund under Section 27 of the Customs Act, 1962 has not been considered at all since the impugned order gives finding beyond the scope of the proceedings - also it was found that both the authorities have not considered the provisions of foreign Trade Policy 2004-2009 which by para 6.15(b) allows the appellant for destruction of the goods under intimation to the Department In view of the infirmities, the matter needs to be remanded to the original authority to consider the claim of refund - appeal allowed by way of remand.

Summary

Issues:
Appeal against rejection of refund claim for duty paid on unutilized raw materials under Foreign Trade Policy 2004-09.

Analysis:
The appeal was against the impugned order passed by the Commissioner(Appeals) rejecting the appellant's claim for refund of customs duty paid on unutilized raw materials under para 6.15(b) of the Foreign Trade Policy 2004-09. The appellant, registered as 100% EOIJ, sought to destroy obsolete raw materials procured duty-free after the warehousing period expired. The jurisdictional officer denied permission for destruction, leading the appellant to pay the duty foregone. The appellant claimed a refund, arguing no duty was required as per the policy. The original authority rejected the refund claim due to the expired warehousing period and lack of extension application. The Commissioner(Appeals) upheld the rejection, prompting the present appeal.

The appellant contended that the impugned order failed to consider relevant laws and lacked a discussion on eligibility for refund. They argued the order violated natural justice principles by not issuing a show-cause notice. The appellant highlighted the renewal of their Customs license and the goods still being in the bonded warehouse, asserting duty payment only upon de-bonding. They challenged the communication denying destruction permission as non-appealable, citing relevant case law. The appellant emphasized fulfilling export obligations and positive Net Foreign Exchange as grounds for duty exemption under para 6.15(b) of the policy.

The Appellate Tribunal, after hearing both sides, found the appellant met export obligations and NFE requirements. It noted the entitlement under para 6.15(b) to destroy materials with Customs permission. The Tribunal criticized the lower authorities for not considering the Customs Act provisions for refund claims and the policy's destruction allowance. It highlighted the lack of communication on denial of destruction permission and the goods still being in the bonded warehouse, exempt from duty. The Tribunal deemed the impugned order unsustainable, emphasizing a remand for a fresh decision considering all relevant factors and principles of natural justice.

In conclusion, the Tribunal set aside the impugned order and remanded the case to the original authority for a reevaluation of the refund claim in light of the appellant's compliance with export obligations, Customs license renewal, absence of communication on denial of destruction permission, and the provisions of the Foreign Trade Policy 2004-09 allowing destruction under intimation to the Department.