Tribunal Allows Destruction of Obsolete Goods Under Updated Policy

The Tribunal allowed the application for destruction of obsolete goods, emphasizing the importance of interpreting the Exim policy and Circulars in line with current regulations. The appellants, a defunct 100% EOU with outdated products, successfully argued for the destruction of goods imported under an earlier notification, citing the amended policy allowing destruction of obsolete goods with the Assistant Commissioner's permission. The Tribunal directed the authority to permit destruction of obsolete goods in accordance with Notification No. 71/2000-Cus., dated 22-5-2000, underscoring the need to comply with the law in disposing of unusable goods.

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Issues:
Confirmation of demand of Customs duty on imported capital goods and raw materials, rejection of plea for destruction of obsolete goods, interpretation of relevant Exim policy and Circular No. 18/98-Cus.

Analysis:
The case involved the confirmation of a demand for Customs duty on capital goods and raw materials imported by the appellants, who were a 100% EOU that became defunct due to outdated products. The Commissioner rejected the plea to destroy the obsolete goods as per Notification No. 53/97-Cus., stating no provision for destruction existed until 22-5-2000, while the show cause notice was issued earlier. The appellants argued that the Exim policy had been amended to allow destruction of obsolete goods before the notice was issued. The Tribunal found merit in the appellants' submission, noting that the Exim policy now permitted destruction of obsolete goods with the Assistant Commissioner's permission. The Circular No. 18/98-Cus. clarified that destruction of waste/scrap could be allowed under the current notification even if not provided for in the earlier notification.

The Tribunal emphasized that the Circular allowed destruction of goods imported under an earlier notification under the current one, and goods unfit for manufacture could be destroyed with the Assistant Commissioner's permission. The Circular also permitted destruction of waste obtained in the process of manufacture, even outside the Export Processing Zone, under certain conditions. In light of this, the Tribunal directed the appropriate authority to allow the destruction of obsolete goods in accordance with Notification No. 71/2000-Cus., dated 22-5-2000.

Ultimately, the Tribunal disposed of the appeal by allowing the application for destruction of obsolete goods, highlighting the importance of interpreting the Exim policy and Circulars in line with the current regulations to facilitate the disposal of outdated and unusable goods in compliance with the law.

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