2019 (7) TMI 727 - AT - Customs

100% EOU - Benefit of N/N. 53/97-CUS - interpretation of the notification - applicability of the notification to goods imported into India for the purpose of manufacture of articles for export of India or for being used in connection with the production or packaging or job work for export of goods by a 100% EOU - HELD THAT - While interpreting the aforesaid notification, the Hon ble Supreme Court in the matter of M/S. MOSER BAER INDIA LTD. VERSUS COMMR OF CUSTOMS, NOIDA 2015 (11) TMI 137 - SUPREME COURT set aside the order of the Tribunal denying the benefit of the aforesaid Exemption Notification to the appellant and held that a reading of the aforesaid notification clearly manifests that it is not necessary that the material which is imported into India has to be used in the manufacture of articles which are to be exported out of India. Even if the said material is used for the purpose of manufacture of articles or for being used in connection with the production or packaging or job work , the same shall still be covered by the aforesaid notification and thus would not attract any customs duty. Non-speaking order - principles of natural justice - HELD THAT - We have considered the submission of the learned counsel that the impugned order is a non-speaking order and that the same has been passed in gross violation of the principle of natural justice. So far as the issue of prior approval is concerned, the learned commissioner while passing the impugned order, failed to take into consideration the certificate dated 29.10.2001 issued by the office of the Commissioner of Customs, Mumbai mentioning the model number of the Elevator in question on it, on the basis of which the appellant effected duty free import of the elevator. The matter is required to be remanded to the Adjudicating authority to decide the issue afresh in accordance with law - appeal allowed by way of remand.

Summary

Issues:
1. Interpretation of exemption Notification No. 53/97-CUS for goods imported by 100% EOU.
2. Applicability of exemption to imported Elevator used in manufacturing CDs for export.
3. Validity of duty demand on imported Elevator and compliance with conditions of the exemption notification.
4. Allegations of irregularity and suppression of facts in the duty demand notice.
5. Adequacy of consideration of submissions and decisions by lower authorities.

Analysis:
1. The judgment concerns the interpretation of exemption Notification No. 53/97-CUS for goods imported by a 100% Export-Oriented Unit (EOU). The issue was whether the imported goods, specifically an Elevator, met the conditions of the exemption for use in manufacturing articles for export or related activities. The Tribunal referred to the relevant provisions and the Supreme Court's interpretation in a similar case.

2. The Appellant, a 100% EOU manufacturing CDs, imported an Elevator for material handling. They argued that the Elevator qualified as a Capital Good under the exemption notification. The Appellant highlighted approvals received from relevant authorities for duty-free import. They contended that the Elevator was essential for their manufacturing process and met the criteria for exemption under Notification No. 53/97-CUS.

3. The duty demand on the imported Elevator was challenged by the Appellant, citing compliance with the conditions of the exemption notification. The Tribunal noted discrepancies in the assessment of the duty liability and the use of the Elevator for material handling within the factory premises. The issue of prior approval and the relevance of the procurement certificate were crucial in determining the duty liability.

4. Allegations of irregularity and suppression of facts in the duty demand notice were raised by the Appellant. The Tribunal examined the language of the notice and the absence of specific claims regarding suppression or misstatement. The Appellant argued that the duty demand was beyond the normal period of limitation, emphasizing the lack of allegations to justify the extended period for duty recovery.

5. The Tribunal found shortcomings in the consideration of submissions and decisions by the lower authorities. The Appellant's contentions and relevant legal precedents were not adequately addressed in the impugned order. Therefore, the matter was remanded to the Adjudicating authority for a fresh decision, emphasizing adherence to natural justice principles and comprehensive review of all submissions and decisions presented in the case.

Overall, the judgment allowed the appeal by way of remand, directing the Adjudicating authority to reevaluate the issues, consider all relevant factors, and decide the case within a specified timeframe to ensure timely resolution of the dispute.