Linked exemption and warehousing scheme required fresh adjudication after later extension of industrial approval.

A later extension of the letter of intent under a linked 100% Export Oriented Unit scheme materially affected the factual basis of the customs action, so the adjudication had to be reconsidered on the updated record. The Tribunal treated the customs warehousing provisions, duty exemption notification and industrial approval as one integrated scheme, and held that the extension could not be ignored because it would undermine the approval mechanism and prejudice the importer. The original order confirming duty, confiscation and penalty was set aside, and the matter was remanded for de novo consideration.

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Issues: Whether the order confirming duty, confiscation and penalty required to be set aside and the matter remanded for de novo consideration in light of the subsequent extension of the letter of intent under the 100% Export Oriented Unit scheme.

Analysis: The import and warehousing arrangement was governed by the customs warehousing provisions and the notification granting duty exemption, while the industrial approval for the 100% Export Oriented Unit status emanated from the Ministry of Industries. The extension of the letter of intent was not before the adjudicating authority when the original order was passed, but it was produced before the Tribunal and materially altered the factual position. The Tribunal held that the two components of the scheme had to be viewed holistically and that the subsequent extension could not be ignored, as doing so would render the industrial authority's extension power ineffective and would prejudice the appellant.

Conclusion: The original order was set aside and the matter was remanded to the Commissioner for de novo consideration after taking the extended letter of intent into account.

Final Conclusion: The appellant obtained a remand for fresh adjudication, with the earlier customs demand, confiscation and penalty not finally sustained on the existing record.

Ratio Decidendi: Where a later and relevant extension of industrial approval fundamentally affects the basis of customs action under a linked exemption and warehousing scheme, the adjudication must be reopened and decided afresh on the updated factual position.

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