2017 (7) TMI 1115 - AT - Customs

Non-compliance with export obligation - It is the case of the Revenue that the said Alpha Rich Granites who warehoused the capital goods for the manufacture and export of goods did not comply with the export obligations committed to GOI - confiscation - redemption fine - penalty - Held that - It is on record that the said Alpha Rich Granites has not complied with the export obligations. If there is no export obligations fulfilled, the machineries imported and installed in the EOU needs to discharge the applicable customs duty which in this case is in the hands of the appellant which he has got as capital goods - appeal dismissed - decided against appellant.

Summary

Issues: Duty liability on capital goods purchased from a 100% EOU, non-compliance with export obligations, confiscation of goods, appeal against penalty and redemption fine.

Duty Liability and Non-compliance with Export Obligations:
The appellant was burdened with duty liability, interest, redemption fine, and a penalty due to purchasing capital goods from a 100% EOU, M/s. Alpha Rich Granites, which failed to fulfill its export obligations. The Revenue authorities discovered that the goods were sold to the appellant after being warehoused by Alpha Rich Granites. Despite the appellant's argument of lack of knowledge regarding the violation and status of the EOU, it was established that the machineries were procured by the EOU but not used for export obligations. The appellant was held liable for the customs duty on the goods in possession, leading to the rejection of the appeal.

Confiscation of Goods and Appeal Against Penalty:
The Revenue authorities seized the capital goods from the appellant, Shri Syed Hussain, and directed him to pay the duty, interest, and penalty. The appellant's appeal against the penalty was rejected by the first appellate authority. The appellant contended that they were unaware of the violation by the importer and the EOU's non-fulfillment of export obligations. However, it was established that the EOU did not comply with export obligations, leading to the duty liability falling on the appellant as the possessor of the goods. Despite the appellant's arguments, the appeal was dismissed, upholding the duty liability, penalty, and redemption fine.

Conclusion:
The appellate tribunal, despite the appellant's absence and arguments, upheld the duty liability on the capital goods purchased from the non-compliant EOU, leading to the rejection of the appeal against the penalty and redemption fine. The judgment emphasized the importance of fulfilling export obligations for goods imported under specific schemes and held the possessor accountable for customs duty in cases of non-compliance, irrespective of their knowledge of the violation.