2023 (11) TMI 71 - AT - Customs

100% EOU - Import of textile machinery without payment of duty - violation of condition No. 6 of Notification No. 53/97-Cus dated 03.06.1997 - respondent-assessee could not satisfy the department regarding their failure to install the textile plant - HELD THAT - It can be seen from the bare perusal of the condition No. 6 of the said notification of the exemption notification that duty free imported goods namely plant-machinery for textile industry should have been for manufacture of export products and export obligation need to have been fulfilled within prescribed time-limit. There is no denying of the fact that duty free imported consignment of machinery was neither installed nor they were used for manufacture of the export items. The order of re-export of duty free imported machineries provided by impugned order-in-original is legally not tenable as the permission for the re-export of the goods could have been given by the concerned proper officer, had they followed the prescribed time schedule as given in the exemption notification and made a request for re-export at the proper time - since the impugned goods have been imported without payment of customs duty, the inherent value of the goods comprises the element of Customs duty therein and therefore permission of allowing destruction of goods without authority of customs law will amount to arbitrary abatement of leviable customs duty. The impugned order-in-original is without any merit and the same is set-aside - matter remanded back to the original adjudicating authority to re-adjudicate the matter, after giving proper hearing to the respondent-assessee - the appeal is allowed by way of remand to the original adjudicating authority.

Summary

Issues:
The issues involved in the judgment are related to the violation of conditions under Notification No. 53/97-Cus dated 03.06.1997 by the respondent assessee, regarding the import and installation of duty-free textile machinery for the manufacture of export products within the prescribed time limit.

Detailed Summary:

1. Facts of the Case: The respondent assessee was engaged in the manufacture of various textile products and imported used textile machinery under specific bills of entry, assessed at a nil rate of duty under Notification No. 53/1997-Cus. Subsequently, allegations were made by the department regarding the failure to install the imported machinery within the required time frame.

2. Show Cause Notice: The department issued a show cause notice demanding the recovery of customs duty, confiscation of machinery, imposition of penalties, and recovery of interest based on the alleged violations of the conditions stipulated in the notification.

3. Order-in-Original: The matter was adjudicated, and the Adjudicating Authority allowed the imported consignment to be exported, which was contested by the department. The department argued that the respondent had not fulfilled the conditions of the notification and failed to install the machinery within the prescribed period.

4. Appellate Tribunal Decision: The Appellate Tribunal found that the order allowing re-export of the machinery and granting permission for destruction of goods was not legally tenable. The Tribunal set aside the order-in-original, upholding the charges in the show cause notice. The matter was remanded back to the original adjudicating authority for further proceedings.

5. Conclusion: The Tribunal held that the impugned order was without merit and allowed the appeal by remanding the case to the original adjudicating authority for re-adjudication on the quantum of penalty and other aspects. The decision was pronounced in the open court on 31.10.2023.

This summary provides a detailed overview of the issues, facts, show cause notice, order-in-original, and the decision of the Appellate Tribunal in the case involving the violation of conditions under Notification No. 53/97-Cus dated 03.06.1997 by the respondent assessee.