Exemption notification and destruction of duty-free inputs within an EOU justified refund after Customs intimation and export obligation fulfilment.

The Single Member Bench's jurisdiction was accepted because the dispute was treated as a post-importation procedural matter and an earlier order had directed listing before that Bench. On refund, an amended exemption notification was applied to permit destruction of duty-free raw materials, consumables, spares, goods manufactured or processed, and scrap or waste within the unit after intimation to Customs and subject to officer satisfaction. As the export obligation had been fulfilled and the authorities had wrongly demanded duty before destruction, the levy could not stand and the duty paid was refundable. The impugned orders were therefore unsustainable and consequential relief followed.

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Issues: (i) Whether the Single Member Bench had jurisdiction to hear the appeals; (ii) Whether duty paid on duty-free raw materials destroyed within the EOU was refundable.

Issue (i): Whether the Single Member Bench had jurisdiction to hear the appeals.

Analysis: The dispute was treated as one concerning post-importation procedure rather than interpretation of notifications, and the earlier miscellaneous order had directed listing before the Single Member Bench. On that basis, jurisdiction was accepted.

Conclusion: The appeals were maintainable before the Single Member Bench.

Issue (ii): Whether duty paid on duty-free raw materials destroyed within the EOU was refundable.

Analysis: The amended condition in the relevant exemption notification provided that duty would not be leviable on raw materials, consumables, spares, goods manufactured, processed or packaged, and scrap or waste or remnants or rejects destroyed within the unit after intimation to Customs authorities, subject to the satisfaction of the officer. The record also showed reliance on the Foreign Trade Policy permitting destruction of unutilized goods with Customs approval, and the earlier decision in the identical matter was applied. Since the assessee had fulfilled the export obligation and the authorities had erred in demanding duty before destruction, the levy could not stand and refund followed.

Conclusion: The assessee was entitled to refund of the duty paid.

Final Conclusion: The impugned orders were unsustainable and the assessee succeeded in the appeals with consequential relief in accordance with law.

Ratio Decidendi: Where an exemption notification, as amended, permits destruction of duty-free raw materials within the unit after intimation to Customs and the export obligation stands fulfilled, duty is not leviable and any duty collected on that basis is refundable.

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