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2019 (8) TMI 68 - AT - Customs100% EOU - Benefit of N/N. 52/2003-cus - Violation of import conditions - latching system - case of Revenue is that permission stands granted only to parts used in motor vehicles and not to latching system - HELD THAT - On going through the said letter dated 09/05/2011 we note that the same is not a fresh LOP issued by the Development Commissioner and the same is to the effect that the item lashing belts system stands included in the earlier LOP dated 27/09/2000 which is modified to that extent. Inasmuch as it is a modification of the earlier LOP, we are of the view that the same has to be held as a clarificatory amendment by the Development Commissioner in which case the Revenue s objection would get over ruled. Time Limitation - HELD THAT - Inasmuch as the issue is a bona fide issue of interpretation of provisions of the Notification, in the absence of contrary evidence reflecting upon any mala fide on the part of the appellant, the extended period was not available to the Revenue. Appeal allowed - decided in favor of appellant.
Issues:
Interpretation of Notification No.52/2003-cus for duty-free import of raw materials by 100% EOU. Applicability of conditions of the Notification regarding authorization by Development Commissioner. Validity of modification in the Letter of Permission (LOP) by Development Commissioner. Invoking longer period of limitation for proceedings. Bona fide issue of interpretation of Notification provisions. Analysis: 1. Interpretation of Notification No.52/2003-cus: The appellant, a 100% EOU engaged in exporting final products, imported raw materials for manufacturing goods for export. The dispute arose when the Revenue sought to deny the benefit of the Notification on the grounds that the goods imported did not meet the conditions specified in the Notification. The appellant was entitled to import duty-free raw materials under the Notification, subject to certain conditions, including obtaining authorization from the Development Commissioner. 2. Applicability of conditions regarding authorization by Development Commissioner: The Revenue argued that the permission granted by the Development Commissioner was limited to parts used in motor vehicles, which did not cover the goods being manufactured by the appellant. This discrepancy led to the initiation of proceedings against the appellant, resulting in a demand for duty payment. The lower authorities upheld the demand, citing non-compliance with the conditions of the Notification. 3. Validity of modification in the Letter of Permission (LOP): During adjudication, the appellant approached the Development Commissioner, who amended the earlier Letter of Permission to include the item "lashing belt system." The modification was communicated in 2011, but the lower authorities rejected it, stating that it was not applicable for the period before the modification date. However, the Tribunal viewed the modification as a clarificatory amendment, overruling the Revenue's objection and considering it valid. 4. Invoking longer period of limitation: The Revenue initiated proceedings against the appellant using an extended period of limitation. However, the Tribunal found the issue to be a bona fide one related to the interpretation of Notification provisions. In the absence of evidence suggesting any mala fide intentions on the part of the appellant, the Tribunal concluded that the extended period was not justified. Consequently, the impugned order was set aside, and the appeal was allowed in favor of the appellant with consequential relief. In conclusion, the Tribunal's judgment clarified the interpretation of the Notification provisions, addressed the validity of modifications in the Letter of Permission, and highlighted the importance of bona fide issues in determining the applicability of extended periods of limitation in such cases.
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