2009 (11) TMI 799 - AT - Customs

Summary

Issues:
1. Applicability of customs duty exemption under Notification No. 204/92-Cus.
2. Non-fulfillment of export obligation and duty payment.
3. Eligibility for concessional duty under Notification No. 72/93-Cus.
4. Interest rate calculation on duty payment.

Analysis:
1. The case involved a Public Sector Undertaking (PSU) that imported goods for manufacturing dumpers to be exported under the Advance Licence Scheme. Due to unforeseen circumstances like the Gulf war, the export obligation could not be fulfilled, leading to the goods being used for domestic sales. The PSU paid duty and interest as per the bond executed. The appellant claimed eligibility for concessional duty under Notification No. 72/93-Cus., stating conditions were similar to the initial import notification. The Tribunal found the PSU not entitled to Notification No. 204/92 benefit due to unmet export obligation.

2. The department argued that after eight years, the PSU disclosed the unfulfilled export obligation, and the conditions of Notification No. 72/93 were different from the initial notification. The department highlighted the necessity of certification by the Assistant Commissioner for the claimed benefit, emphasizing that the goods were not provisionally assessed and cannot be reassessed. The Tribunal noted the PSU's genuine reasons for non-compliance and usage of imported materials for manufacturing dumpers sold domestically.

3. After considering arguments and case records, the Tribunal acknowledged the PSU's genuine inability to meet export obligations due to uncontrollable circumstances. It clarified that duty for post-import condition failure should be based on the import date's duty rate, considering any applicable exemption notifications. The Tribunal examined the conditions of Notification No. 72/93 and found the PSU's compliance with actual usage requirements, granting them the exemption benefit. Regarding interest, the Tribunal ordered calculation at the reduced rate of 15% under the Exim Policy for pending cases, remitting the matter to the original authority for duty and interest calculation.

4. The Tribunal allowed the appeal, extending the benefit of Notification No. 72/93 to the PSU and directing interest calculation at 15%. The decision emphasized the importance of following exemption notification conditions and considering reduced interest rates under the Exim Policy for pending cases.