2018 (1) TMI 1474 - AT - Customs

100% EOU - non-fulfillment of export obligation - Net Foreign Exchange Performance - appellant has complied the export obligation during the extended period - Held that - The original period of five years was extended by the competent authority for another five years and during the extended period the appellant has fulfilled its obligation and was declared as the positive NFEP earner. To this effect necessary certificate was issued by the Development Commissioner, Noida which was neither rebutted nor contravened by the departmental authority. Hence, in this regard the finding in the impugned order appears reasonable - decided against Revenue. Demand of duty and penalty - Held that - It appears that appellant has not deposited the duty and penalty. They have not contested the amount of duty which was paid on the raw material. Hence, in the circumstances, the penalty appears reasonable. So, the appeal filed by the assessee is dismissed. T Both appeals dismissed.

Issues:
1. Export obligation fulfillment during the extended period.
2. Justification of demand raised by the department.
3. Penalty imposition for non-compliance with export obligations.
4. Assessment of duty and penalty payments.

Issue 1: Export obligation fulfillment during the extended period
The appellant, a 100% EOU unit, was engaged in manufacturing woven terry towels and had an export obligation during the period of 1997-2002. The Ministry of Industry allowed an extension until 31-3-2007 to achieve the target NFEP. The appellant exported towels but did not meet the export obligation. The Development Commissioner extended the period, and during this extended period, the appellant fulfilled the obligation and was declared a positive NFEP earner. The certificate issued by the Development Commissioner was not rebutted by the departmental authority. The Tribunal found the impugned order reasonable in this regard, dismissing the department's appeal.

Issue 2: Justification of demand raised by the department
The department raised a demand due to the appellant's failure to fulfill the export obligation during the original and extended periods. The Commissioner examined the order issued by the Development Commissioner, Noida, and dropped the demand, making an addition of only &8377;4,86,184 along with a penalty. The appellant argued that they complied with the export obligation during the extended period, and the department did not object to the Development Commissioner's order. The Tribunal found the department's appeal lacked merit and dismissed it.

Issue 3: Penalty imposition for non-compliance with export obligations
The appellant did not deposit the duty and penalty, and they did not contest the duty paid on raw materials. The penalty was considered reasonable as the appellant had not fulfilled the export obligation. The Tribunal dismissed the appellant's appeal, sustaining the impugned order and the penalty imposed.

Issue 4: Assessment of duty and penalty payments
The Tribunal upheld the penalty imposed on the appellant for non-compliance with export obligations and failure to deposit the duty and penalty. The impugned order was sustained, and both appeals were dismissed by the Tribunal, confirming the duty and penalty assessment.

In conclusion, the Tribunal found that the appellant fulfilled the export obligation during the extended period and dismissed the department's appeal. The penalty imposed on the appellant for non-compliance was upheld, and the duty and penalty payments were deemed reasonable, leading to the dismissal of the appellant's appeal.

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