Appeal allowed, case remanded for fresh consideration after Circular clarification

The Tribunal allowed the appeal by remanding the case for fresh consideration in light of a Board's Circular, which clarified that goods imported under the EPCG scheme and later approved for a 100% EOU could be released subject to scheme conditions. The Tribunal rejected the Revenue's argument regarding the expired warehousing period, emphasizing the binding nature of the Circular. The impugned order for demand of Customs duty and confiscation of goods was set aside, granting the appellants an opportunity to be heard.

---

---

Issues:
Appeal against adjudication order passed by Commissioner of Customs regarding demand of Customs duty and confiscation of goods under Customs Act for contravening provisions of Notification No. 110/95.

Analysis:
The appellants, engaged in manufacturing textile items, imported goods under EPCG scheme and later obtained approval to set up a 100% EOU. They then requested cancellation of EPCG licences as unutilized. A show cause notice was issued for demand of Customs duty and confiscation of goods. The adjudicating authority ordered confiscation and redemption of goods on payment of fine and duty.

The appellants argued that Board's Circular dated 10-11-99 clarified that goods imported under EPCG scheme, later approved for 100% EOU, could be released subject to scheme conditions. They cited Supreme Court decisions emphasizing the binding nature of Board's Circulars. Revenue contended that Circular did not apply as warehousing period had expired, citing a Supreme Court decision on duty rates for warehoused goods.

The Tribunal found that goods were imported under EPCG scheme and later approved for 100% EOU, as per facts undisputed by Revenue. The Board's Circular allowed release of such goods subject to scheme conditions. The Tribunal held that Circular must be followed, rejecting Revenue's argument on expired warehousing period. The impugned order was set aside, and the matter remanded for fresh consideration in light of the Circular, granting appellants an opportunity to be heard. The appeal was allowed by way of remand.

---