2019 (6) TMI 736 - AT - Customs

100% EOU - Clearance of capital goods imported earlier without payment of Customs duty to DTA - benefits of N/N. 53/97-Cus. dated 03.06.1997 - HELD THAT - A bare reading of the said communication would reveal that the Development Commissioner was authorised to grant permission for conversion of EOU under EPCG scheme as one time option for which the request to sell one machine could not be considered at their end but appellant may sell the same in the DTA after payment of applicable duties subject to compliance of Customs Procedures. Therefore, the finding in Order-in-Original and Order-in-Appeal passed stating Development Commissioner had refused permission for clearance of goods to DTA is erroneous. Extended period of limitation - HELD THAT - No mis-declaration or suppression of the fact can be attributed to the conduct of appellant to invoke extended period also - Extended period cannot be invoked. Appeal allowed - decided in favor of appellant.

Summary

Issues:
Clearance of capital goods without appropriate authority's permission and payment of customs duty under Notification No. 53/97-Cus.; Refusal of permission by Development Commissioner for DTA clearance; Payment of duty on depreciated value vs. transaction value; Applicability of EPCG scheme for concessional duty rate.

Analysis:
1. The appeal challenges the inadmissibility of clearing capital goods to a DTA unit without proper authority's permission and payment of customs duty under Notification No. 53/97-Cus. The appellant, an EOU, imported a Die casting machine under duty exemption, later deciding to sell it to a DTA buyer. The dispute arose when the Development Commissioner was said to have refused permission for DTA clearance, leading to a demand for differential duty and confiscation of the machine.

2. The appellant argued that no permission was required under the EXIM Policy for clearance and that the Development Commissioner had indeed granted permission. They also contended that the duty should be based on the depreciated value of the goods, citing relevant case laws and circulars supporting their position. The extended period for invoking duty was also challenged.

3. The respondent department supported the order passed by the Commissioner (Appeals), emphasizing the inapplicability of Notification No. 53/97-Cus. and the appellant's failure to file an ex-bond Bill of Entry. They relied on a case law to justify their stance.

4. The Tribunal analyzed the case record and the communication from the Assistant Development Commissioner SEEPZ, which authorized the sale of goods to DTA upon payment of applicable duties, contradicting the claim of refusal by the Development Commissioner. The Tribunal also noted that the duty should have been paid on the depreciated value, as per the clarificatory circular, and upheld the appellant's argument regarding the assessment and applicability of the EPCG scheme.

5. Consequently, the Tribunal allowed the appeal, setting aside the order of the Commissioner of Customs & Central Excise (Appeals), Goa. The decision was based on the erroneous findings of the refusal of permission and the incorrect assessment of duty, in line with the appellant's submissions and legal provisions.

(Order pronounced in the court on 12.06.2019)