9911796707
|
Home
Issues:
1. Non-fulfillment of export obligation leading to ineligibility for exemption under Notification No. 52/2003-Cus. 2. Dispute regarding the fulfillment of NFEP requirement within the stipulated period. 3. Argument regarding closure of the unit due to refusal of procurement certificate. 4. Time-barred demand for duty and penalty. 5. Violation of conditions under Notification 52/03 due to failure to achieve NFEP. Issue 1: Non-fulfillment of export obligation: The appellant, a 100% EOU engaged in garment manufacturing, failed to achieve the required Net Foreign Exchange Earning Percentage (NFEP) of 114.03% as per the terms of the license. Consequently, they were held ineligible for the exemption availed under Notification No. 52/2003-Cus. The non-fulfillment of the export obligation led to a demand for duty on raw materials and capital goods amounting to Rs. 86,38,544, enforced by the bond filed by them. Additionally, a penalty equivalent to the duty amount was imposed under Section 114A of the Customs Act, 1962. Issue 2: Dispute over NFEP fulfillment period: The advocate for the appellant argued that achieving the NFEP of 114.03% within 3 to 5 months of commencing production, before the unit was closed, was not feasible. The closure of the unit was attributed to the refusal of the jurisdictional Central Excise authorities to issue a procurement certificate. The appellant contended that since the export obligation could not be fulfilled due to the denial of the procurement certificate, they should not be held liable, and duty should not be demanded from them. The appellant also claimed that the demand was time-barred as it was issued after 6 months from the date of re-registration. Issue 3: Closure of the unit and procurement certificate dispute: The closure of the unit was a point of contention, with the appellant asserting that the denial of the procurement certificate led to the failure to fulfill the export obligation. The appellant argued that the department's delay in responding to queries and the subsequent cancellation of the procurement certificate by the appellant within a month should not be grounds for imposing penalties. However, the tribunal found that the closure of the unit and the failure to achieve the NFEP were primarily due to the appellant's inability to procure export orders or other similar circumstances. Issue 4: Time-barred demand and violation of conditions: The appellant claimed that the demand for duty and penalty was time-barred as it was issued after 6 months from re-registration. However, the tribunal held that the closure of the unit did not absolve the appellant of their obligation to fulfill the export requirements as per Notification 52/03. The tribunal emphasized that the duty demand enforced by the bond terms did not warrant considerations of time-barring. Conclusion: The tribunal found that the appellant had not fulfilled the export obligation and violated the conditions of Notification 52/03. Despite the lack of a prima facie case in favor of the appellant, considering their financial position, the tribunal directed them to deposit 40 lakhs within 12 weeks, in addition to the encashed bank guarantee. Failure to comply would result in the dismissal of the appeal without further notice. Compliance was to be reported by a specified date.
|
