2022 (4) TMI 314 - AT - Customs

100% EOU - validity of demand under Section 28A under Customs Act - import of duty free goods for being used for the export of software outside India - Telematic Infrastructural Equipments - N/N. 153/93-Cus. dated 13/08/1993 - HELD THAT - Heading of Section 28A gives power not to recover duties not levied or short levied as a result general practice, Section 28 carries the heading recover of duties not levied or not paid or short levied or short paid or erroneously refunded - It is found that the demand has been made under a wrong provision and hence the same has become not enforceable. It is clear that the Customs Authorities lack jurisdiction - Appeal allowed - decided in favor of appellant.

Summary

Issues Involved:
1. Eligibility for exemption under Notification No. 153/93-Cus.
2. Classification of imported goods as office furniture.
3. Demand of Customs duty, interest, and penalty.
4. Jurisdiction of Customs authorities over 100% EOU.

Analysis:

Issue 1: Eligibility for exemption under Notification No. 153/93-Cus.
The appellant, a 100% EOU, imported 'Telematic Infrastructural Equipments' duty-free under Notification 153/93-Cus. The appellant executed a bond and established a facility for software export. The dispute arose when the appellant imported 'office furniture' under Chapter 94033090, claiming exemption. The Revenue alleged a violation of the notification, leading to a show-cause notice for duty payment. The appellant contended that the imported goods were computer furniture, eligible for duty exemption. The adjudicating authority upheld the duty demand, leading to an appeal.

Issue 2: Classification of imported goods as office furniture.
The appellant argued that the goods were computer furniture, wrongly classified by the Bond Officer. They claimed entitlement to import computer software and tools under the notification. The adjudicating authority demanded duty on ineligible goods imported duty-free, citing Section 28A of the Customs Act. The appellant challenged this decision, asserting that the goods were rightfully covered by the exemption notification.

Issue 3: Demand of Customs duty, interest, and penalty.
The adjudicating authority confirmed the duty demand, interest, and penalty under various sections of the Customs Act. The appellant appealed, arguing against the demand under Section 28A, claiming it was not enforceable. The Tribunal agreed, stating that the demand was made under a wrong provision, lacking enforceability. Consequently, the impugned order was set aside, and the appeal was allowed with consequential benefits.

Issue 4: Jurisdiction of Customs authorities over 100% EOU.
The appellant contended that any violation by a 100% EOU should be handled by the Development Commissioner, not the Assistant Commissioner of Customs. They cited CBEC instructions and circulars to support their argument. The Tribunal accepted this contention, ruling that the Customs authorities lacked jurisdiction over the EOU and set aside the duty demand under Section 28A, providing relief to the appellant.

In conclusion, the Tribunal allowed the appeal, setting aside the duty demand and confirming the appellant's eligibility for exemption under Notification No. 153/93-Cus. The judgment emphasized the correct classification of goods, jurisdictional issues, and the enforceability of duty demands under the Customs Act.