EOU Compliance Vs Substance

In a layered decision, the Tribunal addresses multiple contentious issues involving a 100% Export Oriented Unit (EOU), ranging from classification of granite products, DTA clearances, inter-EOU transfers, and exemption compliance.

The Tribunal underscores that classification is foundational, as it directly determines duty liability, and cannot be decided mechanically without examining the nature of processing.

Equally significant is the finding that procedural infractions, such as lack of prior approval for inter-EOU transfers, cannot automatically trigger duty demands, especially where substantive compliance (use of inputs, achievement of NFE, and actual receipt of goods) is not disputed.

The case is remanded, reinforcing a fact-driven, substance-oriented adjudication framework.