2005 (9) TMI 144 - AT - Customs

Summary

Issues:
1. Confiscation of imported equipment worth Rs. 6 crores
2. Duty demand and penalties imposed
3. Finding that the equipment is not required for software development
4. Dispute over the clearance and permission granted by Software Technology Park Authorities
5. Applicability of previous judgments in similar cases
6. Decision on the stay petitions and waiver of pre-deposits

Analysis:
The judgment by the Appellate Tribunal CESTAT, New Delhi, involved the confiscation of equipment worth Rs. 6 crores imported for the development of software for WLL telephony. The impugned order resulted in the confiscation of the equipment and imposition of duty demand and penalties due to a finding that the equipment was not necessary for software development, leading to a dispute regarding the clearance and permission granted by the Software Technology Park Authorities.

The appellants argued that the equipment had been specifically cleared as relevant for software development by the Director of Software Technology Park and had been removed with permission for testing with MTNL. They cited precedents, including a decision by the Tribunal in a similar case, to support their contention that once specific clearance had been granted by the government authorities in charge of software development, Customs authorities could not question the requirement afresh. The Tribunal noted that the equipment was necessary for software development, particularly for testing software for WLL technology used by MTNL.

The Tribunal differentiated the present case from a previous Supreme Court judgment involving goods disposed of by the importer under an advance license scheme, stating that in this case, the imported goods were still being used for their intended purpose. Consequently, the Tribunal held that the previous judgment did not apply to the current situation, and the Revenue had no prima facie case. As a result, the requirements of pre-deposits under the impugned order were waived, and recovery was stayed pending the disposal of the appeals. The Tribunal also directed that Revenue authorities could not interfere with the use of the equipment without specific clearance from the Technology Park authorities and the Tribunal. Ultimately, the stay petitions were allowed in accordance with the stated terms.