2018 (4) TMI 236 - AT - Customs

100% EOU - import of capital goods as well as raw material - non-fulfillment of export obligation - Held that - In the instant case, the capital goods were installed in the factory and were used primarily for the export of the goods - duty not leviable on capital goods - duty on raw material upheld. Appeal allowed in part.

Summary

Issues: Appeal against Order-in-Original, Duty demand on capital goods and raw-material, Compliance with export obligations, Interpretation of Notifications

Analysis:
1. Appeal against Order-in-Original: The appeal was filed against Order-in-Original No. C. Noe V/CUS/15/75/2011 dated 31/01/2012. The High Court directed the Tribunal to dispose of the appeal within three months, emphasizing timely resolution of the matter.

2. Duty demand on capital goods and raw-material: The appellant, a 100% Export Oriented Unit, faced duty demands on capital goods and raw-material due to failure in fulfilling export obligations. The appellant argued that duty on capital goods should not apply based on a Tribunal decision citing specific clauses of notifications and previous cases. The Tribunal agreed that duty on capital goods was not applicable as they were used for export purposes, modifying the impugned order accordingly. The appellant agreed to pay duty on raw-material as per the law.

3. Compliance with export obligations: The appellant faced challenges in meeting export targets due to external factors like strikes in the USA leading to canceled orders. Despite efforts, the appellant could not fulfill obligations within the specified period, resulting in duty demands. The Tribunal considered these circumstances while deciding on the duty liability.

4. Interpretation of Notifications: The Tribunal analyzed the provisions of Notification No. 52/2003 and Notification No. 53/97 to determine the duty liability on capital goods and raw-material. The Tribunal's decision was based on the specific conditions outlined in the notifications and previous judicial interpretations, ensuring a comprehensive understanding of the legal framework governing duty exemptions and liabilities.

Overall, the Tribunal partially allowed the appeal, modifying the impugned order to exclude duty on capital goods while upholding the duty liability on raw-material as per the law. The judgment demonstrates a meticulous analysis of relevant legal provisions, past decisions, and factual circumstances to arrive at a reasoned decision in the matter.