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Issues involved: Failure to fulfil export obligation against advance licences leading to demand of duty, interest, and penalty.
Summary: The appeal before the Appellate Tribunal CESTAT CHENNAI involved the issue of the appellant's failure to fulfil export obligations against advance licences, resulting in a demand for duty, interest, and penalty. The appellants, engaged in the manufacture of bulk drugs and drug intermediates, had imported raw materials under the Advance Licence scheme but did not meet the export obligation. The Ld. Commissioner imposed the duty, interest, and penalty due to this non-compliance. During the hearing, the appellant's advocate highlighted that the DGFT authorities had ordered the clubbing of advance licences through a letter dated 19.5.2011, which was subsequently communicated to the Commissioner of Customs via another letter dated 20.5.2011. The Joint Director General of Foreign Trade's letter dated 19.5.2011 informed about the clubbing of export obligations as per the relevant policy provisions. The Tribunal noted the importance of examining the matter in light of the DGFT's letter. Consequently, the Tribunal set aside the impugned order and remanded the matter back to the Commissioner of Customs for fresh adjudication in accordance with the law. The adjudicating authority was directed to provide the appellants with an opportunity for a hearing before making a decision. The appeal was allowed by way of remand, and the stay application was disposed of. The decision was dictated and pronounced in open court by the Tribunal.
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