2000 (2) TMI 167 - AT - Customs

Summary

Issues:
1. Confirmation of duty amount under Section 28 of the Customs Act, 1962 along with interest.
2. Confiscation of imported capital goods under Section 111(o) and imposition of penalty under Section 112A.
3. Extension of validity of the 100% Export Oriented Unit (EOU) scheme by the Ministry of Industries.
4. Consideration of extension of validity by the Customs authorities for the private bonded warehouse.

Analysis:

Issue 1:
The appeal arose from an Order-in-Original confirming a duty amount under Section 28 of the Customs Act, 1962, along with interest. The duty amount of Rs. 4,69,28,763/- was confirmed, and capital goods imported under the 100% EOU scheme were confiscated under Section 111(o) but allowed to be redeemed on a fine of Rs. 50,000/-. Additionally, a penalty of Rs. 45,000/- was imposed on the appellant under Section 112A.

Issue 2:
The appellants were granted a letter of intent for a 100% EOU for manufacturing activities, and they imported capital goods claiming exemption under Notification No. 13/81-Cus. However, they failed to install the capital goods or commence production to fulfill the export obligation. Due to the non-renewal of the warehousing license, the demand for payment of duty on the imported capital goods was made.

Issue 3:
The Ministry of Industries extended the validity of the letter of intent for the 100% EOU scheme up to September 2000, with the possibility of further extensions. The Ministry considered the representations of the appellants and acknowledged the merit of their explanations, indicating that the project's viability was still feasible.

Issue 4:
The Customs authorities were not made aware of the extension of validity by the Ministry of Industries at the time of adjudication. The department argued that since the warehouse license was valid only until 31-12-1996 and no further renewal was sought by the appellant, the demands for duty and confiscation were legally justified under Section 72(1)(b) read with Section 61 of the Customs Act.

The Tribunal set aside the Order-in-Original and remanded the matter back to the Commissioner for a fresh consideration in light of the extension of validity by the Ministry of Industries. The Tribunal emphasized the importance of not undermining the legal authority of the Ministry of Industries in granting extensions for the 100% EOU scheme to ensure justice and economic benefits. The Commissioner was directed to expedite the proceedings and consider the extension of the letter of intent in accordance with the law.