2007 (7) TMI 454 - AT - Customs

Summary

Issues:
1. Classification of goods as accessories or spares under EPCG scheme.
2. Admissibility of refund for excess duty paid.
3. Compliance with apex court's remand order and natural justice principles.

Issue 1 - Classification of goods as accessories or spares under EPCG scheme:
The appellants imported goods under an EPCG scheme license specifying various equipments with accessories. Some main equipments were imported with accessories as per the license, while others without specified accessories were cleared under relevant Bills of Entry. The assessing authority initially denied EPCG benefit for imported accessories and spares, leading to duty payment under protest. Subsequently, refund claims were filed, and the jurisdictional Asst. Collector allowed a refund for goods treated as accessories. However, a part of the refund was received, leading to a review of the order. The Commissioner (Appeals) held that refund was not admissible, leading to an appeal.

Issue 2 - Admissibility of refund for excess duty paid:
The Hon'ble Supreme Court remanded the case to the Commissioner (Appeals) for a fresh decision on the refund claims based on merits. The Commissioner (Appeals) set aside the Asst. Collector's order, stating that refund was not admissible to the assessee. The Tribunal found that the Commissioner (Appeals) did not properly follow the apex court's parameters and observations, leading to a lack of proper verification and examination of documents to determine whether the goods were accessories or spares.

Issue 3 - Compliance with apex court's remand order and natural justice principles:
The Tribunal directed a remand to the lower appellate authority with appropriate directions due to the failure to follow the Supreme Court's parameters. The Commissioner (Appeals) was criticized for not conducting a thorough examination of documents, including packing lists, to determine the classification of goods. The Commissioner's reliance on interpretation of terms and case law without proper verification was deemed insufficient. The Tribunal set aside the impugned order and directed the lower appellate authority to pass a speaking order after conducting proper verification as per the apex court's remand order, ensuring natural justice by providing copies of all relevant documents to the party.