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Issues: Whether clearance of obsolete capital goods by a 100% EOU to an EPCG licence holder in DTA was eligible for the concessional rate of duty and whether the benefit of Notification No. 53/97-Cus could be denied.
Analysis: The respondent had obtained permission from the Development Commissioner to clear the capital goods in DTA, subject to maintenance of export obligation and payment of applicable duty. The record showed compliance with those conditions. The authorities also relied on Board and DGFT clarifications stating that supplies by EOUs under the EPCG Scheme are treated as imports for duty purposes and that EPCG concessional notifications apply to such clearances without any separate exemption notification. The earlier Tribunal view on the same issue had been affirmed by the Supreme Court, and no contrary material was produced by the Revenue.
Conclusion: The clearance to the EPCG licence holder was entitled to concessional duty, and denial of the exemption benefit was unsustainable.
Final Conclusion: The Revenue failed to establish any basis for disturbing the order granting relief, and the demand, confiscation, fine, interest, and penalty did not survive.
Ratio Decidendi: Clearances by a 100% EOU to an EPCG licence holder are eligible for concessional customs duty when the governing policy permissions and end-use based notifications are satisfied, and no separate exemption notification is required where the competent authorities have clarified otherwise.
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