2007 (4) TMI 476 - AT - Customs

Summary

Issues: Interpretation of Customs Notification No. 29/97 under the EPCG Scheme

Issue 1: Compliance with Import Conditions
The appellant imported goods under the EPCG Scheme but faced a Show Cause Notice for violating conditions regarding minimum import value within two years. The Commissioner proposed confiscation, penalty, and duty payment. The appellant argued compliance by including indigenously procured goods, fulfilling export obligations, and benefiting domestic manufacturers.

Issue 2: Interpretation of EPCG Scheme and EXIM Policy
The appellant contended that indigenously procured goods should be considered under the EPCG Scheme, contrary to the Adjudicating Authority's view. The judges analyzed the EPCG Scheme's provisions, including deemed export benefits for domestic manufacturers, to interpret the Notification's conditions accurately.

Analysis:
The appellant imported goods under the EPCG Scheme but faced a Show Cause Notice for violating conditions regarding minimum import value within two years. The Commissioner proposed confiscation, penalty, and duty payment. The appellant argued compliance by including indigenously procured goods, fulfilling export obligations, and benefiting domestic manufacturers.

The judges examined the EPCG Scheme and EXIM Policy provisions to determine whether indigenously procured goods should be considered under the EPCG Scheme's conditions. They highlighted the importance of a harmonious interpretation of the Notification and the Policy, emphasizing the benefits for domestic manufacturers and the concept of deemed exports.

In their analysis, the judges concluded that the appellant had fulfilled the conditions of the Customs Notification. They held that the impugned goods were not liable for confiscation, and the appellant was not liable for penalties. They deemed the duty demand and interest unsustainable, setting aside the impugned order and allowing the appeal with consequential relief.