1995 (5) TMI 112 - AT - Customs

Summary

Issues Involved:
1. Eligibility for exemption under Notification No. 13/81-Cus., dated 9-2-1981.
2. Confiscation of goods under Section 111(m) of the Customs Act, 1962.
3. Fulfillment of export obligation under the Import and Export Policy 1992-97.

Issue-wise Detailed Analysis:

1. Eligibility for exemption under Notification No. 13/81-Cus., dated 9-2-1981:
The appellants, a joint venture company, imported 150 Image Intensifier Tubes and claimed duty-free clearance under Notification No. 13/81-Cus., dated 9-2-1981. The Customs authorities initially denied this exemption, arguing that the imported items were finished products not covered by the notification. The Tribunal, however, found that the Collector erred in holding that the imported Bare Image Intensifier Tubes were finished products. The Tribunal determined that the process to which the tubes were subjected constituted manufacturing, making them eligible for exemption under the said notification. The Tribunal remanded the matter for de novo consideration regarding the fulfillment of other conditions under Notification No. 13/81-Cus. or alternatively under Notification No. 206/76-Cus.

2. Confiscation of goods under Section 111(m) of the Customs Act, 1962:
The Collector ordered the confiscation of the goods under Section 111(m) of the Customs Act, 1962, read with Section 3 of the Import and Export (Control) Act, 1947, but allowed redemption on payment of a fine of Rs. 10 lakhs. The Tribunal reversed this decision, finding that the imported goods were not fully finished products and required further manufacturing. Consequently, the order of confiscation and the fine imposed were set aside.

3. Fulfillment of export obligation under the Import and Export Policy 1992-97:
The appellants argued that they complied with Condition No. 7 of Notification No. 13/81-Cus., which allows exemption for goods used in manufacturing by a 100% EOU and sold in India under certain conditions. They referred to letters from the Ministry of Commerce and the Development Commissioner, which permitted sales to Indian Defence organizations under global tender conditions. The Tribunal agreed with the appellants that the supplies to the Indian Defence Department could be deemed as made under global tender conditions, satisfying the export obligation. The Tribunal noted that the fulfillment of export obligations is a post-importation condition to be examined by the concerned authority after the clearance of goods and completion of the manufacturing process.

Conclusion:
The Tribunal set aside the impugned order, allowing the appeal and holding that the imported goods are eligible for exemption under Notification No. 13/81-Cus., subject to the satisfaction of all other conditions. The fulfillment of export obligations will be determined by the concerned authority post-clearance and post-manufacture.