2007 (4) TMI 270 - HC - Central Excise

Summary

Issues involved:
The revenue's appeal u/s 35G of the Central Excises and Salt Act, 1944 challenging the Tribunal's order allowing benefits of CBEC Circular No. 60/99 to the assessee-respondent.

Summary:
1. The assessee, a 100% Export Oriented Undertaking, entered into a contract with a French firm for Rice Processing machinery. Due to the supplier's liquidation, only a part of the machinery was supplied, rendering it unusable. The assessee sought permission for re-export, but faced rejection due to non-fulfillment of conditions. The Commissioner (Appeals) rejected their appeal, leading to the Tribunal granting benefits u/s CBEC Circular No. 60/99.

2. The Tribunal's decision was based on the Circular's provisions allowing replacement or destruction of goods found defective or unfit for use. The Tribunal found the imported machinery unfit for use without the complete set, thus permitting abandonment as per the Circular.

3. The revenue contended that the Circular could not be applied retrospectively, citing the date of bill of entry presentation. They also referred to conditions in a notification for destruction of goods. The assessee argued that the machinery was indeed unfit for use, justifying abandonment as per the Circular.

4. The Court upheld the Tribunal's decision, emphasizing the machinery's unusability due to incomplete supply. The Circular's provisions allowed for destruction or clearance of goods unfit for use, without insistence on re-export by the supplier.

5. The Court concluded that the appeal lacked merit, as the machinery was unfit for use and the supplier did not demand re-export. The Circular aimed to address difficulties faced by export-oriented units in such situations, dismissing the appeal as without merit.