2002 (9) TMI 711 - Commission - Customs

Summary

Issues:
1. Interpretation of capital goods under Notification No. 49/2000.
2. Jurisdiction of Settlement Commission in EPCG cases.
3. Liability of importers under EPCG scheme.
4. Settlement of duty liability and release of seized goods.

Detailed Analysis:
1. The case involved a dispute regarding the classification of imported cars as capital goods under Notification No. 49/2000. The applicants imported cars under the EPCG scheme for conversion into tourist taxies. The Show Cause Notice alleged that the imported cars did not qualify as capital goods. The applicants, represented by their advocates, acknowledged the duty liability and expressed willingness to pay the demanded amount to settle the case.

2. The issue of the Settlement Commission's jurisdiction in EPCG cases was raised by the Revenue. They argued that the Commission cannot entertain cases where importers fail to fulfill export obligations under the EPCG scheme. The Revenue emphasized that such cases involve non-fulfillment of obligations rather than mis-declaration, making them beyond the Settlement Commission's jurisdiction. A larger bench was requested to decide whether EPCG cases fall under the Commission's purview.

3. The applicants contended that the imported goods were authorized under the EPCG scheme by the DGFT. They highlighted that the Customs had initially allowed exemption under Notification No. 49/2000, which specified export obligation requirements. The advocates argued that the seized goods were within the initial two-year period, where export obligations were not due. The definition of capital goods and the import authorization provided further support for the applicants' position.

4. Considering the facts and circumstances, the Commission allowed the case to proceed under Section 127C of the Customs Act. The applicants were directed to pay the admitted duty liability within 30 days and provide a bond with a bank guarantee for the seized goods' value. The release of the seized goods was permitted for proper upkeep, but the request to sell the goods was denied. The order specifically applied to the five seized cars imported through Nhava Sheva Port, emphasizing compliance with statutory provisions.

This detailed analysis covers the legal issues, arguments presented by both parties, and the final decision of the Settlement Commission in the case.