2014 (6) TMI 544 - AT - Customs

Utilization of foreign exchange earning for EPCG scheme as well as SFIS - period prior to 1.4.2007 - Held that - Revenue being protected partially due to payment of duty by the appellant, appeal may be remanded to the learned Commissioner to grant fair opportunity of hearing expeditiously to both sides to put forth their defence to resolve all the dispute considering submissions of both sides. The demand being huge, appellant is directed to make application to the Commissioner within one month of receipt of this order to fix the date of hearing and on the date fixed, the appellant shall make entire submission both on facts and law without seeking adjournments. Commissioner upon hearing, within three months of last date of hearing, shall pass reasoned and speaking order - Matter remanded back - Decided in favour of assessee.

Summary

Issues Involved:
1. Interpretation of foreign exchange earning utilization prior to 1.4.2007 for EPCG scheme and SFIS.
2. Whether the Tribunal should remand the appeal for re-examination of the issue.
3. Concerns regarding the interpretation of notification granting incentive scheme.
4. Registry's approach in listing cases for early hearing.

Analysis:

1. The primary issue in this judgment revolves around the utilization of foreign exchange earnings before 1.4.2007 for the EPCG scheme and SFIS. The dispute arises from the contention of the Revenue that such utilization is not permissible, while the DGFT clarifies that the Exim policy does not prohibit it. The Tribunal notes the DGFT's letter supporting this stance, leading to the conclusion that the demand based on this issue was not sustainable.

2. Considering the prolonged nature of the appeals and the appellant's assertion that the matter can be resolved by examining relevant notifications and policies, the Tribunal deems it inappropriate to keep the appeal pending. Thus, the Tribunal proposes a remand for a re-examination of the issue at the grassroots level to address the submissions made by the appellant's counsel.

3. The Tribunal delves into the interpretation of the notification granting the incentive scheme to the appellant. It emphasizes the settled legal principle that exemptions affecting public funds must be strictly construed, citing various judgments by the apex court to support this stance. In light of this, the Tribunal decides to remand the appeal to the Commissioner to ensure a fair opportunity for both parties to present their defenses and resolve the disputes.

4. Lastly, the judgment sheds light on the Registry's approach in listing cases for early hearing, highlighting concerns about the Registry's functioning. The Tribunal directs an inquiry into the Registry's practices, emphasizing the need for a comprehensive report and explanations from the defaulting officer to address the issues causing potential harm to the Revenue. The Registry is instructed to present the report for consideration and necessary action.

In conclusion, the judgment addresses critical issues related to foreign exchange earnings utilization, interpretation of incentive schemes, and procedural concerns within the Tribunal's Registry, emphasizing the importance of fair hearings, legal interpretations, and efficient administrative practices in the adjudication process.