2003 (1) TMI 653 - Commission - Customs

Issues:
1. Import of capital goods under EPCG Scheme and non-compliance with conditions.
2. Re-export and replacement of faulty capital goods.
3. Clarifications sought from DGFT regarding duty settlement.
4. Admitted duty liability and discrepancy with the duty demanded by Revenue.
5. Settlement of duty liability and release of Bank Guarantee.
6. Immunity from penalty, interest, and prosecution.

Issue 1: Import of capital goods under EPCG Scheme and non-compliance with conditions:
The applicant was issued a license under the EPCG Scheme for importing capital goods for offset printing. The applicant failed to fulfill the export obligation of the imported goods within the specified time frame, leading to a Show Cause Notice for non-compliance with the Customs duty exemption notification.

Issue 2: Re-export and replacement of faulty capital goods:
The applicant encountered technical issues with the imported capital goods, leading to re-export and replacement. The faulty IRIS Inkjet Printer was re-exported, and a new model was imported. The damaged SCANNER was also re-exported and replaced. The DGFT approved a reduction in the total CIF value based on the re-exported goods.

Issue 3: Clarifications sought from DGFT regarding duty settlement:
The Commission sought clarification from the DGFT regarding the duty element settled by the Customs Authority. The applicant submitted requests for reducing the CIF value and export obligation based on DGFT's approval. The applicant amended the application to reflect the revised duty liability.

Issue 4: Admitted duty liability and discrepancy with duty demanded by Revenue:
The applicant declared an admitted duty liability of Rs. 11,78,746, which was lower than the duty demanded by the Revenue. The Commission found the admitted duty liability to be correct, considering the re-exportation of the faulty goods certified by both Revenue and DGFT.

Issue 5: Settlement of duty liability and release of Bank Guarantee:
The Commission settled the duty liability at Rs. 11,78,746, which was paid by the applicant. The Bank Guarantee of Rs. 13,50,000 was ordered to be released to the applicant.

Issue 6: Immunity from penalty, interest, and prosecution:
The applicant was granted immunity from imposition of fine and penalty due to full disclosure of duty liability. The Commission allowed interest at 10% per annum instead of the statutory 24% due to the applicant's cooperation. Immunity from prosecution under the Customs Act, 1962, and the Indian Penal Code was also granted, subject to the settlement order not being obtained through fraud or misrepresentation.

This detailed analysis of the judgment highlights the issues surrounding the import, re-export, duty liability settlement, and the applicant's request for immunity from penalty, interest, and prosecution.

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