Tribunal upholds customs duty demand on machinery for export despite appellant's legal arguments

The tribunal upheld the customs duty demand on machinery imported for export production, despite the appellant's arguments based on a sale agreement approved by the High Court and higher purchase arrangement. The duty-free goods were sold domestically without payment of duty, leading to the duty liability remaining with the appellant. The tribunal emphasized the importance of due accounting of warehoused goods and dismissed the special rights claimed by industrial units under BIFR to dispose of goods without duty payment. The appellant was directed to deposit the duty amount within six weeks.

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Issues involved: Customs duty demand on machinery imported for export production, disposal of machinery, approval of sale agreement by High Court, ownership of goods by finance company, duty liability of the appellant, relevance of higher purchase agreement, proceedings before BIFR, duty-free import condition, due accounting of warehoused goods.

Summary:
The case involved a customs duty demand concerning machinery imported for export production but later found to have been disposed of. The appellant argued that the machinery was sold under an agreement approved by the High Court, satisfying the requirement of Section 72(d) of the Customs Act. Additionally, it was contended that since the goods were procured on a higher purchase basis from a finance company, the duty demand should not apply. The appellant also mentioned being before the BIFR and requested a waiver.

The opposing view highlighted that duty-free goods cannot be sold domestically without payment of duty, regardless of any agreements or ownership claims. The sale agreement without notice to Customs was deemed ineffective in altering the duty liability. Reference was made to a Supreme Court judgment to support this stance.

The tribunal found no merit in the appellant's arguments, emphasizing that the duty liability remained despite the sale of the machinery. Due accounting of warehoused goods, as required by Section 72(d), was not met by selling the goods in the domestic market without duty payment. The special rights claimed by industrial units under BIFR to dispose of goods without duty payment were dismissed.

Ultimately, the duty demand was upheld, and the appellant was directed to deposit the amount within six weeks and report compliance by a specified date.

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