2015 (4) TMI 520 - AT - Customs

Denial of Benefit of Notification No. 110/95-Cus. - Violation of condition of Notifications - Demand of differential duty - Held that - Goods exported and counted towards fulfilment of export obligation were not manufactured in the factory where the capital goods imported under EPCG Scheme were installed It is seen from the exemption notification 110/95-Cus. that export obligation in relation to importers other than those rendering services, means export to a place outside India of products manufactured with the use of capital goods imported, assembled or manufactured in terms of this notification. Thus it is evident that the condition of the exemption notification has been clearly violated rendering the appellant ineligible for the benefit of the said notification and as a consequence they become liable to pay differential duty. - no infirmity in the impugned order - Decided against assessee.

Summary

Issues:
1. Customs duty demand confirmation under EPCG license for imported capital goods.

Analysis:
The appeal was filed against an order-in-appeal confirming a Customs duty demand of Rs. 6,07,127 along with interest, which was upheld from the order-in-original. The issue revolved around the appellants importing capital goods under the EPCG license and claiming benefits under Notification No. 110/95-Cus. The appellants were obligated to fulfill export obligations as per the conditions of the exemption notification. It was found that the goods exported did not meet the requirement of being manufactured in the factory where the capital goods were installed, violating the provisions of the EXIM 1992-97 policy. Consequently, the demand was confirmed based on this discrepancy.

The appellants argued that they had already submitted the export obligation discharge certificate, citing judgments in their favor. However, as no one appeared for the personal hearing, the Tribunal proceeded to decide the appeal on merit. The Tribunal noted that the export obligation should be fulfilled by exporting goods manufactured using the capital goods imported under the EPCG Scheme. Since the goods exported did not meet this criterion, the appellants were deemed ineligible for the benefit of the notification, making them liable to pay the differential duty. Additionally, a circular by CBEC emphasized the requirement for a statement of exports confirming the use of imported capital goods in manufacturing the exported goods.

Ultimately, the Tribunal found no fault in the impugned order, leading to the dismissal of the appeal. The decision was based on the clear violation of the conditions specified in the exemption notification, which mandated the exported goods to be manufactured using the imported capital goods. The judgment highlighted the importance of adhering to the specified requirements for availing benefits under such schemes, emphasizing the need for strict compliance with the stated conditions to avoid liability for differential duty payments.