Export obligation non-fulfilment and later cancellation justified de novo adjudication of customs and excise demands.

An Export Oriented Unit's customs and excise duty demands were set aside for fresh adjudication because the factual position had materially changed after the Letter of Permission was terminated and export obligations were admittedly not fulfilled. The Tribunal noted that the later cancellation and related developments had already been brought before the Original Authority, and both sides accepted that the matter could be reconsidered on the complete record. The matter was therefore remanded for de novo decision, with the appellant to be given adequate opportunity to present its defence.

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Issues: Whether the order confirming customs duty and excise duty demands against an Export Oriented Unit should be set aside and the matter remanded for fresh adjudication in view of the subsequent termination of the Letter of Permission and the admitted non-fulfilment of export conditions.

Analysis: The admitted position was that the unit had been permitted to operate as an EOU subject to export obligations, that no exports were made, and that the Letter of Permission was ultimately terminated with effect from 01.04.2013. The challenge before the Tribunal was confined to the contention that proceedings initiated earlier by the Customs authorities were premature. The Tribunal noted that, by the time the impugned order was passed, the later developments, including cancellation of the permission by the competent authority, were already taken into account by the Original Authority. Since both sides agreed that the matter could be reconsidered on the basis of the complete factual position now available, a fresh adjudication was considered appropriate.

Conclusion: The impugned order was set aside and the matter was remanded to the Original Authority for de novo decision after granting the appellant adequate opportunity to present its defence.

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