2007 (7) TMI 521 - AT - Customs

Summary

Issues:
1. Customs duty recovery based on non-fulfillment of export obligation for imported capital goods under EXIM Policy 1997-2002.

Analysis:
The case involved the appellant who had imported capital goods under the EXIM Policy 1997-2002 and respective Notifications. The appellant defaulted in rent and bank dues, leading the bank to take possession of the goods. However, the revenue insisted on recovering customs duty due to alleged non-fulfillment of the export obligation, despite the goods being in customs bond-house and the export obligation time not yet expiring. The appellant argued that they had partially fulfilled the export obligation, citing legal precedents to support their position.

Upon hearing both parties and examining the facts, the Tribunal found merit in the appellant's contentions. Relying on the legal precedents mentioned, the Tribunal held that the Customs Commissioner could not confirm demands prematurely when the goods were still under customs bond-house and the export obligation time had not lapsed. Therefore, the Tribunal set aside the impugned order and remanded the matter to the Original Authority. The Original Authority was instructed to wait for the lapse of time as per the bond conditions and consider only the fulfillment of the export obligation before commencing fresh proceedings. The decision emphasized the importance of adhering to the EXIM Policy and Notifications in such cases.

In conclusion, the Tribunal's judgment clarified that the confirmation of demand for customs duty based on non-fulfillment of export obligation was premature in this scenario. The decision highlighted the need for the Customs Commissioner to consider the specific circumstances, such as goods being in customs bond-house and the export obligation timeline, before taking any enforcement actions. The case underscored the significance of procedural adherence and proper evaluation of facts in customs duty recovery matters related to import obligations under relevant trade policies and regulations.