2015 (12) TMI 1001 - HC - Customs

Fulfillment of export obligation - advance license - petitioner had imported certain consumables without payment of duty with an export obligation of granite tiles - failure to produce such evidence show cause notice was issued asking the firm to submit the documents showing export obligation fulfillment - Held that - When the petitioner failed to produce any documents whatsoever of having discharged the export obligation we see no infirmity in the orders passed by the authorities below. By merely stating that the FIR was lodged for lost documents petitioner cannot substitute the requirement of production of documents demonstrating export obligation. We may recall even this reaction from the petitioner came long after the period for filing relevant documents before the authorities had lapsed. The firm in the meantime was already declared defaulter for being unable to fulfill export obligation. It was only in response to show cause notice issued by the authorities that for the first time the petitioner took the stand that the documents could not be produced since they were lost - Decided against assessee.

Summary

Issues involved:
Challenge to Order-in-original dated 10.2.2010 and appellate order dated 8th December, 2011 regarding import of consumables without payment of duty with an export obligation.

Analysis:

1. Challenge to Orders: The petitioner challenged the Order-in-original and the appellate order related to the import of consumables without payment of duty with an export obligation. The petitioner failed to submit documents demonstrating fulfillment of the export obligation within the prescribed time limit. Despite a show cause notice, the firm did not produce any evidence of export obligation fulfillment, leading to being declared as a defaulter.

2. Imposition of Penalty: The adjudicating authority imposed a penalty of Rs. 13,13,400 on the firm for failing to fulfill the export obligation. The authority observed that the firm did not submit any export documents, such as Shipping bills or Bank realization certificates, towards the fulfillment of the export obligation. Consequently, the firm was deemed to have imported in full and was directed to pay customs duty plus interest at 15%. The penalty was calculated as four times the CIF value of the license, amounting to Rs. 13,13,400.

3. Judicial Review: The High Court upheld the orders passed by the authorities below, stating that there was no infirmity in their decisions. The petitioner's claim of lost documents for export obligation fulfillment was deemed insufficient to substitute the requirement of producing the necessary evidence. The petitioner's explanation came after the expiration of the deadline for submitting relevant documents, and only in response to the show cause notice. As a result, the petition was dismissed, affirming the penalty and the declaration of the firm as a defaulter.

In conclusion, the High Court upheld the penalty imposed on the firm for failing to fulfill the export obligation, emphasizing the importance of timely submission of required documents and dismissing the petitioner's claim of lost documents as a valid excuse.