EOU import entitlement prevails over general second-hand goods restriction when goods are authorised and not prohibited.

A 100% EOU was entitled to import used valves where the Foreign Trade Policy's general restriction on second-hand goods did not override the specific in paragraph 6.2(b) allowing an EOU to import all goods required for its approved activities, provided they were not prohibited under the ITC (HS). The Letter of Permission covered valves as raw materials and components, and the Handbook of Procedures treated the EOU's LOP/LOI as authorisation for all purposes. On that basis, the import could not be denied merely because the goods were second-hand, and the demand was unsustainable.

---

---

Issues: Whether used valves imported by a 100% Export Oriented Unit were eligible for import and duty exemption under the Foreign Trade Policy notwithstanding the restriction on second-hand goods.

Analysis: The import restriction in paragraph 2.17 of the Foreign Trade Policy applies generally to second-hand goods, but paragraph 6.2(b) specifically permits an EOU to import all types of goods required for its activities so long as they are not prohibited items in the ITC (HS). The Letter of Permission covered valves as raw materials and components, and the Handbook of Procedures treated the LOP/LOI issued to EOU units as an authorisation for all purposes. In view of these provisions and the supporting Tribunal precedents, the import of used valves by the EOU could not be denied on the ground that they were second-hand goods.

Conclusion: The used valves were permissible imports for the appellant's EOU, and the demand was unsustainable.

Final Conclusion: The impugned order was set aside and the appeal succeeded on merits.

Ratio Decidendi: Where the Foreign Trade Policy specifically permits an EOU to import all goods required for its approved activity, a general restriction on second-hand goods does not apply if the goods are not prohibited and are covered by the unit's authorisation.

---