Tribunal rules in favor of appellants on Free Trade Zone import case, no separate license required

The Tribunal ruled in favor of the appellants in a case concerning the import of goods into a Free Trade Zone without prior approval from the Development Commissioner. The Tribunal found that the goods fell under the Open General License, eliminating the need for a separate license or prior approval. Consequently, the Tribunal dispensed with the pre-deposit of duty demanded by lower authorities, stayed the enforcement of the orders, and disposed of the stay applications in favor of the appellants.

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Issues: Interpretation of Customs Act, 1962 regarding import of goods in Free Trade Zone without prior approval of Development Commissioner.

In this case, the appellants, an export-oriented unit in the Kandla Free Trade Zone, imported capital goods without obtaining prior approval from the Development Commissioner. The Additional Collector ordered confiscation of the goods due to the perceived non-compliance with the projected value and approval requirements. The appellants filed appeals against these orders and sought stay and waiver of pre-deposit of duty under Section 129E of the Customs Act, 1962. The Tribunal initially held that no penalty was imposed, making the pre-deposit premature. However, upon subsequent hearings, the Tribunal required the deposit of disputed duty for the appeal to proceed. The Tribunal eventually dismissed the appeals for non-payment of duty. The appellants then appealed to the Supreme Court, which directed them to apply for waiver and stay under Section 129E, leading to the current stay applications.

The main contention revolved around the interpretation of Notification No. 77/80-Cus. and OGL No. 19/88, which exempted actual users from requiring a license for importing capital goods into Free Trade Zone. The appellants argued that they were actual users and had not contravened any regulations as they had applied for necessary permissions from the Development Commissioner post-importation. The appellant's advocate contended that the Additional Collector erred in requiring a license and prior approval from the Development Commissioner, as the goods were covered under OGL. The advocate highlighted that the goods were for their use and intended for export production, satisfying the conditions post-importation.

After careful consideration of the submissions and documents, the Tribunal acknowledged that the goods fell under the Open General License, eliminating the need for a separate license. The Tribunal found no explicit requirement in the notification for prior written approval from the Development Commissioner before importation. Consequently, the Tribunal dispensed with the pre-deposit of duty demanded by the lower authorities and stayed the enforcement of the orders, ruling in favor of the appellants. The stay applications were thus disposed of in favor of the appellants.

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