2004 (6) TMI 531 - AT - Customs

Summary

Issues:
1. Import of capital goods under EPCG Licence and failure to meet export obligations.
2. Confiscation of capital goods, duty demand, interest, and penalties imposed.
3. Request for modification of EPCG Licence from 0 duty to 10% duty.
4. Correctness of the Commissioner's decision and remand for re-adjudication.

Issue 1: Import of capital goods under EPCG Licence and failure to meet export obligations:
The appellants were issued an EPCG Licence for the import of capital goods for manufacturing and exporting ready-made garments. They imported goods valued at Rs. 32,83,791/- within the stipulated period but failed to meet the export obligation of Rs. 1 crore within the specified time frame. The Commissioner of Customs confiscated the capital goods and imposed penalties on the appellants for non-compliance with export obligations.

Issue 2: Confiscation of capital goods, duty demand, interest, and penalties imposed:
The Commissioner confiscated the capital goods but allowed redemption on payment of fines. He confirmed duty demands, interest, and imposed penalties on M/s. Pierre Colsun Inc. and its Managing Partner for violating the Customs Act. The penalties were imposed under Section 112 of the Customs Act, 1962, for non-compliance with export obligations and unauthorized sale of capital goods.

Issue 3: Request for modification of EPCG Licence from 0 duty to 10% duty:
The appellants requested a modification of their EPCG Licence from 0 duty to 10% duty under the EPCG Scheme. The EPCG Committee accepted their request and communicated the decision to the authorities. However, the original licence was seized by the DRI, causing delays in the modification process. The appellants argued that since the licence was permitted to be amended, the Commissioner's order needed to be set aside for re-adjudication.

Issue 4: Correctness of the Commissioner's decision and remand for re-adjudication:
The Tribunal found that the DRI's failure to return the licence for modification after the EPCG Committee's decision caused unnecessary delays and additional work for the authorities. As the modification of the licence was approved, the Tribunal set aside the Commissioner's order and remanded the case for re-adjudication, considering the permitted amendment to the licence. The decision highlighted the importance of aligning administrative actions with approved modifications to licenses under the EPCG Scheme.

This detailed analysis of the judgment from the Appellate Tribunal CESTAT, Bangalore, highlights the issues of import under the EPCG Licence, confiscation of goods, penalties imposed, and the request for licence modification, culminating in the remand for re-adjudication based on the approved amendment to the licence.