2006 (6) TMI 56 - AT - Customs

EXIM Respondents imported capital goods under EPGG scheme but can t able to fulfill the export obligation in last two years As per boards circular allowing payment of duty and interest in respect of unfulfilled portion of export obligation.

Summary

Issues:
1. Appeal against order passed by Commissioner by Revenue.
2. Fulfillment of export obligation under EPCG Scheme.
3. Calculation of Customs duty and interest.
4. Interpretation of relevant notifications and circulars.
5. Adjudication of duty demand, interest, and penalty.

Analysis:
1. The appeal was filed by Revenue against the order passed by the Commissioner regarding the fulfillment of export obligations under the EPCG Scheme by the respondents.
2. The respondents had obtained an EPCG license for importing capital goods with an obligation to export the final product within 5 years. They fulfilled the export obligation for the first three years but later sought permission to opt out of the scheme due to inability to meet the obligation.
3. Upon obtaining permission to opt out of the EPCG Scheme, the respondents paid Customs duty and interest. However, Revenue issued a show cause notice raising duty demand, interest, and proposing confiscation of goods and penalty. The Commissioner confirmed a proportionate duty and interest amount, considering the export obligation fulfilled in the initial years.
4. The main issue in the appeal was whether the benefit of export made by the respondents in the 2nd and 3rd year should be considered while calculating the Customs duty for the imported capital goods. The Tribunal referred to a previous decision and a circular allowing payment of duty and interest only for the unfulfilled portion of the export obligation.
5. The Tribunal found that the Revenue failed to provide any contrary decision to challenge the previous decision and circular. It upheld the view taken by the adjudicating authority, emphasizing that the Revenue cannot argue against its own circulars. Consequently, the appeal filed by Revenue was rejected.

This detailed analysis covers the issues raised in the judgment, focusing on the fulfillment of export obligations, calculation of Customs duty, interpretation of relevant notifications and circulars, and the final adjudication of duty demand, interest, and penalty.