2014 (11) TMI 70 - AT - Customs

Fulfillment of export obligation - Demand of differential amount of duty - Confiscation of goods - appellants have been granted extension of time for installation of Plant and Machinery up to 30th August 2014. - Held that - If the installation period itself is extended, naturally it would amount to postponement of export obligation also. Having regard to all these circumstances, in our opinion, the order passed by the original authority has to be set aside and original authority has to be directed to wait for the extension period granted for installation to be over for initiating further action. - matter remanded back - Decided in favour of assessee.

Summary

Issues: Failure to install imported capital goods, extension of time for installation, relevance of DGFT's extension, authority to take action, setting aside the impugned order, remanding the matter.

In this case, the appellant obtained an EPCG license and imported capital goods but failed to install them within the required timeframe, leading to the initiation of proceedings resulting in a confirmation of a differential duty demand, redemption fine, and penalty. The appellant claimed to have been granted an extension of time for installation up to a specific date, supported by a letter from the DGFT. The learned A.R. argued that the appellant deliberately delayed installation without proper explanation, emphasizing that the Customs Authority retained the power to take action despite the DGFT's extension.

Upon considering the submissions, the Tribunal disagreed with the A.R.'s stance, stating that extensions granted by the DGFT for fulfilling obligations must be accepted by Customs Authorities. The Tribunal highlighted the presence of Customs Representatives in EPCG Committee Meetings deciding on extensions, indicating a connection between installation periods and export obligations. Consequently, the Tribunal set aside the original authority's order, directing them to wait until the extended installation period expired before taking further action. The Tribunal clarified that their decision aimed to prevent premature actions, allowing the original authority to proceed if the appellant failed to install the goods within the extended timeframe. Any amounts deposited by the appellant would remain with the Revenue until a final decision was reached. Ultimately, the Tribunal disposed of the stay application and appeal, remanding the matter for further proceedings based on the extended installation period granted by the DGFT.