2007 (8) TMI 126 - AT - Customs

Non- fulfillment of export obligation in terms of Not. 110/95 BIFR sanctioned a scheme for rehabilitation of appellant company Total period for discharge obligation extended to 5 years so the concept of 3rd block year 4th block year etc. has become redundant Appeal allowed by way of remand

Summary

Issues:
1. Non-fulfillment of export obligation for imported Airjet Weaving Machines under EPCG licenses.
2. Confirmation of demands of duty by Assistant Commissioner and Commissioner (Appeals).
3. Extension of period for discharge of export obligation by BIFR and DGFT.
4. Appeal against demands of duty for different block years.
5. Consideration of extension of export obligation period by Grievance Redressal Committee.
6. Decision on demands of duty for imported goods under different licenses.

Analysis:
1. The appellants imported Airjet Weaving Machines under EPCG licenses but failed to fulfill the export obligation for the third year, leading to demands of proportionate duty with interest confirmed by the Assistant Commissioner. The appellate authority upheld this decision due to non-compliance even after an extension by DGFT. Appeals were filed against these decisions (C/77 & 78/2003).

2. Subsequently, it was discovered that the export obligation was not met for the fourth and fifth years as well, resulting in additional demands of duty with interest. The Assistant Commissioner confirmed these demands, which were again upheld by the appellate authority. Appeals were filed against these decisions (C/51 & 52/2003).

3. The Board for Industrial and Financial Reconstruction (BIFR) sanctioned a scheme for the appellant-company's rehabilitation, recommending an extension of the export obligation period by five years. The Grievance Redressal Committee and DGFT granted extensions for certain licenses, allowing the appellants time until 2007 to complete exports as per the Notification.

4. The Tribunal found that the extension granted by DGFT rendered the block year concept redundant for one license, leading to the allowance of appeals against demands of duty for the relevant years. However, for another license, where the period for export obligation extension needed clarification, the Tribunal remanded the matter for further examination by the original authority.

5. The Tribunal acknowledged the proceedings related to BIFR, Grievance Redressal Committee, and DGFT, emphasizing the importance of clarity regarding the extended period for discharge of export obligation for each license. The Tribunal directed the original authority to reconsider the demands of duty for the second license after clarification and examination of the exports made towards fulfilling the obligation.

6. The Tribunal allowed one set of appeals against demands of duty and remanded another set for further review, emphasizing the need for clarity and examination of the export obligation extensions granted by the authorities.