Duty-free import for STP units upheld where STPI approval covered the goods and Customs could not later dispute exemption.

Goods imported by an STP unit against a valid STPI certificate were treated as eligible for duty-free clearance under Notification No. 52/2003-Customs because the competent STPI authority had approved the goods for use in the unit and Customs had already allowed clearance on that basis. The Tribunal followed the view that Customs could not later dispute the scope of that approval or raise a duty demand on the importer; any objection had to be addressed to the approving authority. The duty demand was therefore held unsustainable.

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Issues: Whether goods imported by an STP unit and covered by a valid STPI certificate were eligible for duty-free clearance under Notification No. 52/2003-Customs despite the Department's later objection that the goods were not covered by the exemption.

Analysis: The goods had been imported on the strength of the certificate issued by the STPI authorities and were allowed duty-free clearance by Customs, and they remained in the bonded warehouse. The denial of benefit was not justified once the competent STPI authority had certified the goods for use in the STP unit. The Tribunal followed the earlier view that Customs could not take a contrary stand after such approval, and any grievance about the scope of approval had to be taken up with the competent approving authority rather than by raising a duty demand on the importer.

Conclusion: The goods were held eligible for duty-free import under the notification, and the duty demand was unsustainable.

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