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Issues involved:
Confirmation of interest on Customs duty exemption u/s Notification No. 13/81-Cus. and de-bonding of Unit from EOU Scheme. Confirmation of interest: The appellant imported duty free Capital Goods, spares, and raw materials under Notification No. 13/81-Cus. for setting up a 100% EOU. Due to non-fulfillment of export obligation, full demand was raised for Customs duty and interest. The appeal focused on the confirmation of interest. The appellants argued that de-bonding from the EOU Scheme was delayed by Customs despite permission granted by the Government of India in 1996. Citing legal precedents, they contended that interest should not be levied when goods couldn't be cleared due to Customs inaction. The SDR acknowledged the exemption of interest under Notification No. 67/95-Cus. for warehoused goods but defended the delay in the impugned order. Decision: The Tribunal observed that Notification No. 67/95-Cus. exempts interest on Customs duty for warehoused goods. Both authorities overlooked this provision, rendering the confirmation of interest unjustified. The delay in de-bonding the unit from the EOU Scheme, despite permission granted in 1996, supported the appellant's argument against interest payment. Relying on legal judgments, the Tribunal ruled that interest is not payable in such circumstances. Consequently, the impugned order was set aside, and the appeal was allowed with any consequential relief. *(Operative portion of this Order was pronounced in open court on conclusion of hearing)*
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