Duty-free re-import under the 100% EOU Scheme required deeper scrutiny on valuation, policy limits, and repaired capital goods.

Duty-free re-import of repaired capital goods under the 100% EOU Scheme required closer scrutiny where the unit had already utilised a substantial part of its overall duty-free import ceiling. The challenged order had proceeded on repair charges and freight without first examining whether the full value of the repaired goods, on re-import into the unit, would still remain within the prescribed limit. The interaction between the two relevant policy paragraphs, including whether machinery originally installed before EOU status could be re-imported duty free after repair abroad, also warranted further examination. A prima facie case for stay was found, and the impugned order was stayed pending final hearing.

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Issues: Whether the impugned order allowing duty-free re-import of repaired capital goods under the 100% EOU Scheme should be stayed pending final hearing, and whether the valuation of the repaired goods and the applicability of the relevant policy paragraphs required further examination.

Analysis: The imported goods were subject to an overall duty-free import ceiling under the 100% EOU Scheme, and the record showed that a substantial portion of that limit had already been utilised. The order under challenge had proceeded on the basis of repair charges and freight, without first addressing whether the full value of the repaired goods, as imported back into the unit, would remain within the prescribed ceiling. The issue whether machinery originally installed before the unit became a 100% EOU could be re-imported duty free after repairs abroad under the policy also required deeper scrutiny, including the interaction between the two relevant policy provisions.

Conclusion: A prima facie case for stay was made out, and the impugned order was stayed.

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