2016 (12) TMI 1501 - AT - Customs

100% EOU - Fulfillment of export obligation - installation of machinery - import under EPCG scheme - Notification No. 49/2000-Cus. dated 27.3.2000 - Held that - Since the appellants have put the goods imported to use and have partially fulfilled the export obligations, it is not proper to deny the benefit due to partial fulfilment of export obligations and demand the entire duty - Secondly, the duty has been demanded without taking into account the depreciated value. This is not correct. In the present case, the capital goods have been put to use by the appellants. Therefore, at the time of de-bonding, duty can be demanded only on the depreciated value - Further, the non-fulfilment of export obligation is on account of the business conditions prevailing at that time and not on account of any mala fide act. In such circumstances, imposition of penalties is not justified - redemption fine and penalties set aside. The duties of customs are payable at the time of importation of the goods. Admittedly, the capital goods were imported by the appellant on 28.12.2000 and the same has been in the custody of the appellant; therefore, the appellant is liable to pay duty chargeable as on 20.12.2000. Consequently, the plea of the appellant that depreciated value of the machine is to be taken as basis for the duty is not acceptable. Appeal disposed off - decided partly in favor of appellant.

Summary

Issues:
- Appeal against duty demand, redemption fine, and penalty for non-discharge of export obligation.

Analysis:
1. Facts of the Case:
- The appellant, a 100% EOU, imported a digital printing machine under EPCG License.
- Failed to install the machine, leading to non-fulfillment of export obligation.
- Show cause notice issued in 2011 demanding duty, interest, redemption fine, and penalty.

2. Appellant's Arguments:
- Supplier's liquidation prevented machine installation, beyond appellant's control.
- Cited precedents like Taurus Novelties Ltd. and Premier Granites Ltd. to support no confiscation.
- Contended duty demand lacked justification, considering depreciated value and imposing fines.

3. Revenue's Submission:
- Emphasized duty demand due to appellant's failure in export obligation fulfillment.

4. Tribunal's Decision:
- Tribunal noted reasons for non-installation were beyond appellant's control.
- Referenced Taurus Novelties Ltd. case to support setting aside redemption fine and penalty.
- Quoted Premier Granites Ltd. case to justify duty demand based on partial fulfillment and depreciated value.
- Held redemption fine and penalty not imposable due to appellant's circumstances.

5. Disputed Points:
- Appellant argued for duty calculation based on depreciated value, not accepted by the Tribunal.
- Tribunal differentiated present case from Suvarna Aqua Farm & Exports Ltd. and Nava Bharat Enterprises Ltd. cases.
- Duty payable based on machine value at importation, rejecting appellant's plea for depreciated value.

6. Final Order:
- Duties payable as per machine value on importation date.
- Redemption fine and penalty imposed on the appellant set aside.
- Appeal disposed of accordingly.

This judgment highlights the Tribunal's consideration of factors beyond the appellant's control in failing to fulfill export obligations, leading to the setting aside of redemption fine and penalty. The decision emphasizes duty calculation based on the importation value, rejecting the appellant's plea for depreciated value. The case analysis showcases the application of legal precedents and relevant statutes to determine duty liability and imposition of fines in cases of non-compliance with export obligations.