2014 (11) TMI 235 - AT - Customs

Exemption under the Notification No. 93/2004 - Cus. dated 10.09.2004 - discharge of export obligation - Held that - Appellant had failed to fulfill the conditions enumerated in the Notification No. 93/2004 - Cus. dated 10.09.2004 regarding achievement of the export obligation. Thus, as per the declaration furnished in the executed bond, the authorities below have rightly confirmed the foregone duty demand along with interest. Further, during the appeal proceedings before the Additional Director General of Foreign Trade, the appellant undertook to pay the customs duty along with interest. - Partial stay granted.

Summary

Issues:
1. Failure to fulfill export obligation under Notification No. 93/2004 - Cus.
2. Appellant's request for waiver of pre-deposit.
3. Admittance of Customs duty liability and payment by the appellant.

Issue 1: Failure to fulfill export obligation under Notification No. 93/2004 - Cus.
The appellant was issued an Advance License for importing copper scrap, availing Customs duty exemption under Notification No. 93/2004 - Cus. However, the appellant failed to produce evidence of discharge of export obligation within the stipulated time frame. This led to the demand and confirmation of Customs duty liability foregone on the imported materials by the authorities. The appellant attributed the failure to achieve the Export Obligation to slackness in demand for the finished product due to Chinese competition and global economic recession. The appellant's company was placed under liquidation, and the Official Liquidator took over the assets and records of the company under the Companies Act, 1956.

Issue 2: Appellant's request for waiver of pre-deposit
The appellant requested a waiver of pre-deposit, which was strongly objected to by the revenue-respondent. The revenue-respondent argued that the condition of the notification dated 10.09.2004 had not been fulfilled by the appellant. The appellant had submitted a statement of duty payable along with interest before the jurisdictional Customs authorities following an Interim Order-in-Appeal. The appellant sought waiver due to the company being under liquidation, stating willingness to pay the Customs duty along with interest to close the case.

Issue 3: Admittance of Customs duty liability and payment by the appellant
During the appeal proceedings before the Additional Director General of Foreign Trade, the appellant admitted to the Customs duty liability and undertook to pay the duty along with interest. The appellant was directed to pre-deposit an amount of Rs. 3,00,000 within four weeks and report compliance before the Tribunal. Failure to comply within the specified time frame would result in the dismissal of the appeal for non-compliance of the stay order. The stay petition was disposed of accordingly.