2007 (1) TMI 350 - AT - Customs

Summary

Issues:
The judgment involves the import of capital goods under an EPCG license, clearance at a concessional rate under Customs Notification No. 110/95, failure to discharge export obligations under the EPCG scheme, issuance of a show-cause notice for duty recovery, confirmation of duty demand by the original authority, rejection of appeal by the Commissioner (Appeals), and the contention regarding fulfillment of export obligations before the specified deadline.

Import of Capital Goods and Export Obligations:
The appellants imported capital goods under an EPCG license and cleared them at a concessional rate under Customs Notification No. 110/95. Subsequently, it was discovered that the appellants had not fulfilled their export obligations under the EPCG scheme year-wise. The department issued a show-cause notice for recovering the duty forgone on the imported goods due to an alleged violation of condition No. 6.5(ii) under the Notification. The original authority confirmed the duty demand with interest, and non-payment would lead to enforcement of the bank guarantee for recovery.

Appeal and Discharge of Export Obligations:
The party appealed to the Commissioner (Appeals) against the duty demand confirmation, which was rejected. The appellants argued that they had completely discharged their export obligations before March 1999, as per Public Notice No. 5/1997-2002 and a discharge certificate issued by JDGFT. They contended that the JDGFT had requested the Commissioner of Customs to "redeem the case" without penalties, based on the fulfillment of export obligations before the deadline.

Judgment and Decision:
The Tribunal found that the export obligation under the license was fully met by the party before the deadline of March 31, 1999, within the allowed 5-year period. It was noted that the public notice allowed for such exports to be deemed within the obligation period for regularization, except for cases involving misrepresentation or fraud. As the present case did not fall under those categories, the appellants were entitled to benefit from the public notice and the discharge certificate issued by JDGFT. The Tribunal disagreed with the rejection of the discharge certificate by the Commissioner (Appeals) and set aside the impugned order, allowing the appeal with consequential relief to the appellants.