2012 (1) TMI 130 - AT - Central Excise

Tribunal overturns decision on equipment transfer, finds no breach of import policies or Customs duty evasion.

The Tribunal allowed the appeal, setting aside the lower authority's decision regarding the transfer of equipment between Export Oriented Units (EOUs). It ... Confiscation of goods - Intention to evade duty - Variation in the description of the goods - Held that:- It is very clear that in this case, the equipment was moved from one 100% EOU to another 100% EOU after due intimation and no case of contravention of any terms of import policy or evasion of Customs duty is brought out. All telecommunication equipment is allowed to be freely imported. There is no duty implication because goods were transferred from one 100% EOU to another. So I find Revenue has made out a case without any substance. Therefore, I find that this is a case where pre-deposit of duties can be waived for admission of the appeal and same is waived and appeal itself is taken up for hearing since the equipment is lying unutilized for long time - Decided in favour of assessee. Issues:1. Transfer of equipment between two 100% EOU units with a variation in description.2. Confiscation of goods, imposition of fines, and penalties due to the difference in equipment description.3. Assessment of intention to evade Customs duties and contravention of import policy.4. Consideration of pre-deposit of duties for appeal admission.5. Decision on the appeal and setting aside the lower authority's order.Analysis:1. The case involved the transfer of equipment between two 100% Export Oriented Units (EOU) with a discrepancy in the description of the goods. The appellants moved equipment from one unit to another with a slight variation in the description provided for seeking permission. The Counsel argued that the equipment's functionality remained the same despite the description difference, emphasizing a bona fide error without intent to circumvent regulations or evade duties.2. The Revenue contended that the appellants should have been more diligent in the permission process, highlighting the challenge for Departmental officers to assess the significance of specification variances. The goods were seized, confiscated, and fines along with penalties were imposed due to the discrepancy in equipment description.3. Upon considering both arguments, it was established that the transfer of equipment between EOUs did not contravene import policies or involve Customs duty evasion. The Tribunal found no duty implications as the transfer occurred between EOUs, where all telecommunication equipment could be freely imported. Consequently, the Tribunal concluded that the Revenue's case lacked substance and waived the pre-deposit of duties for appeal admission, allowing the appeal for hearing.4. The Tribunal, after assessing the case, found no substantial merits to uphold the lower authority's decision. Therefore, the appeal of the appellant was allowed, and the impugned order was set aside, providing consequential benefits to the appellants. Additionally, both the stay petition and the appeal were allowed by the Tribunal.This detailed analysis of the judgment highlights the issues involved, the arguments presented by both parties, and the Tribunal's decision regarding the transfer of equipment between EOUs, the discrepancy in equipment description, and the subsequent confiscation, fines, and penalties imposed.