2016 (12) TMI 633 - AT - Customs

Import of capital goods - EPCG scheme - demand on account of non-fulfillment of export obligation as such that the goods exported by the appellant were not manufactured in the factory where the goods imported under EPCG were installed; the said exports were made from their other factory and it was violation of the provisions of para 4.1 of the EXIM Policy 1992-97 - Held that - The appellant has produced a copy of the letter F. No.20/663/AM96 PCG-1/664 dated 14.10.99 from the office of Director General of Foreign Trade, Ministry of Commerce, Government of India, wherein the subject EPCG dated 15.03.1996 has been mentioned. This letter says that the appellant has fulfilled entire EO (export obligation) imposed in respect of the subject EPCG licence. This letter further mentions that the appellant is advised to approach the concerned customs authorities for the release of their bank guarantee/LUT executed by them. This letter has been signed by Foreign Trade Development Officer. When the Licencing Authority, which is the office of DGFT certifies that export obligation has been fulfilled, it is not for the Revenue to deny the benefit of the subject Notification No. 110/95-Cus unless Revenue is able to get specific clarification from DGFT that the goods exported from other factory are not to be taken into account for getting benefit under EPCG scheme - appeal allowed - decided in favor of appellant-assessee.

Summary

Issues:
Appeal against Commissioner of Customs (Appeals) order sustaining order-in-original, Fulfillment of export obligation under EPCG licence, Discrepancy in factory location for export, Interpretation of Notification No. 110/95-Cus, Denial of benefit by Revenue, Validity of DGFT certificate, Consequential relief to the appellant.

Analysis:
The appellant appealed against the order of the Commissioner of Customs (Appeals) upholding the order-in-original passed by the Deputy Commissioner. The appellant imported capital goods under an EPCG licence at a concessional rate of custom duty and NIL rate of additional duty, subject to fulfilling export obligation. The appellant claimed benefit under Notification No. 110/95-Cus and submitted an export obligation discharge certificate from the DGFT office. However, the Revenue contended that the goods were exported from a different factory, violating EXIM Policy provisions.

Upon careful consideration, the Tribunal reviewed the documents presented. A letter from the DGFT office confirmed that the appellant had fulfilled the export obligation imposed under the EPCG licence. The Tribunal noted that Notification No. 110/95-Cus required the importer to produce a certificate from the licensing authority showing the extent of export obligation fulfilled. The Tribunal emphasized that if the DGFT certifies the fulfillment of export obligation, the Revenue cannot deny the benefit of the notification unless there is specific clarification from the DGFT regarding goods exported from a different factory.

Consequently, the Tribunal allowed the appeal in favor of the appellant, granting consequential relief. The judgment highlighted the importance of the DGFT certificate in determining the fulfillment of export obligations under the EPCG scheme, emphasizing the significance of official certification in availing benefits under relevant notifications. The decision clarified the role of the Revenue in challenging such certifications and underscored the need for specific clarifications from the relevant authorities before denying benefits to importers.