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Issues involved: Appeal by Department against order-in-appeal, Duty foregone under EPCG licence, Export obligation fulfillment, Retrospective effect of amendments.
Duty foregone under EPCG licence: The respondent imported goods under EPCG licence and paid duty at a concessional rate. The duty foregone was challenged through a show cause notice, leading to a series of appeals and remands. The Commissioner (Appeals) ultimately held that the demand was not sustainable under the law, prompting the Department to appeal. Export obligation fulfillment: The respondent was required to fulfill an export obligation within a specified period. The Department argued that exports made without using the imported machinery for manufacturing goods cannot be counted towards fulfilling the obligation. However, the respondent contended that they had fulfilled the export obligations under the new policy, supported by a certificate from DGFT authorities. Retrospective effect of amendments: The dispute centered around the retrospective nature of amendments to notifications. The respondent argued that the amendments aligned with the liberalized policy and should be considered retrospective. The Tribunal upheld the view that the amendment was retrospective but remitted the matter for verification of whether the export obligation was fulfilled under the revised policy. This judgment delves into the complexities of duty foregone under an EPCG licence, the fulfillment of export obligations, and the retrospective implications of policy amendments. The Tribunal considered the transitional arrangements under the new policy, the roles of DGFT authorities, and the alignment of Customs notifications with the liberalized policy. Ultimately, while upholding the retrospective nature of the amendment, the Tribunal remitted the matter for verification of export obligation fulfillment under the revised policy.
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