9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2004 (7) TMI 439 - AT - CustomsEXIM - Capital goods import under EPCG scheme - Export obligation - Whether they have fulfilled their export obligation - HELD THAT - A perusal of the said letter dated 11-6-2001 reveals that the Appellants were eligible for extension in export obligation period up to 31-3-2002 provided they make a specific request along with bank guarantee valid up to 31-3-2003 covering the Customs duty in proportion to the unfulfilled export obligation together with 24% simple interest thereon from the date of import up to 31-9-2002 which should reach DGFT on or before 29-6-2001. Para 3 of the said letter further provides that such request should be accompanied by an export statement as per Appendix 10-C showing export obligation fulfilment up to 31-3-2001 duly certified by a Chartered Accountant and the concerned bank confirming the realization of Free Foreign Exchange. Nothing has been brought on record by the Appellants to show that these conditions mentioned in letter dated 11-6-2001 had been complied by them. In view of this we hold that as the Appellants have not fulfilled the export obligation they have to pay differential Customs duty. We therefore uphold the demand of duty made against them. The capital goods which were imported by availing exemption under Notification No. 160/92 are liable to confiscation as the condition of the Notification has not been fulfilled by the Appellants. However considering the fact that more than 64% export obligation has been fulfilled by them we reduce the redemption fine from Rs. 3 crores to Rs. 1 crore only. For the same reason we reduce the penalty to Rs. 10 lakhs. The interest is chargeable from the Appellants though there was no provision for charging interest at the time of import of the machinery. However at the time when they were to fulfil the export obligation the provision for charging the interest had come into effect. In 1998 when they failed to discharge their export obligation the provision of interest was very much on the statute book. The appeal is disposed of in the above terms
Issues involved: The appeal filed by M/s. Parasrampuria Synthetics Ltd. revolves around whether they have fulfilled their export obligation.
Details of the Judgment: 1. Export Obligation Fulfillment: The Appellants, manufacturers of various yarns, imported capital goods under the EPCG Scheme and were obligated to export finished products equivalent to 4 times the CIF value of the goods imported within 5 years. They claimed to have fulfilled 64% of the export obligation by a certain date but could not fulfill the remaining due to international market conditions. They argued that they should be allowed to club exports from their other manufacturing units to meet the obligation, citing Para 6.5 of the EXIM Policy, 1997-2002. The Commissioner of Customs, however, held that the conditions were not met, leading to a demand of duty and penalty imposition. 2. Interpretation of Export Policy: The Appellants contended that the Commissioner misunderstood Para 6.5(ii) of the Policy, which allows for exports through third parties if the EPCG license holder's name is indicated on the Shipping Bill. They also argued that the requirement of using capital goods for manufacturing goods exported by other units would render Para 6.5 impractical. They sought an extension for export obligation fulfillment, citing Public Notice No. 5 (RE-99)/1997-2002. 3. Legal Arguments: The Appellants maintained that the imported capital goods were used for manufacturing goods that were exported, fulfilling over 64% of the obligation. They argued against confiscation and imposition of redemption fine and penalty, stating that they made sincere efforts to meet the export obligation. They also disputed the demand for interest. 4. Revenue's Position: The Revenue argued that the Appellants failed to fulfill the export obligation within the stipulated time frame as per the EPCG Scheme and relevant policies. They contended that exports from other units could not be considered for obligation fulfillment under the Policy in force during the import of capital goods. 5. Judgment: The Tribunal upheld the demand for duty, citing non-fulfillment of export obligation by the Appellants. While acknowledging the Appellants' attempt to club exports from other units, it found that the necessary conditions were not met. The Tribunal reduced the redemption fine and penalty due to the partial fulfillment of the export obligation but upheld the charge of interest, noting the statutory provision in effect at the time of obligation fulfillment. 6. Settlement Commission Application: The Tribunal referenced an application made by the Appellants before the Customs & Central Excise Settlement Commissioner, where they admitted duty liability. The Tribunal noted the Settlement Commission's authority to consider the case based on the information provided by the Appellants. The appeal was disposed of with the above decisions.
|
