2017 (5) TMI 1125 - AT - Customs

Exemption under N/N. 93/2004-Cus dated 10.9.2004 - fulfillment of export obligation - it was alleged that appellant failed to submit the Export Obligation Discharge Certificate from the DGFT who is a licensing authority for the advance licenses - Held that - the export obligation needs to be fulfilled by the appellants. The notification nowhere specify that such fulfillment of the export obligation is to be established only on the basis of EODC to be obtained from the DGFT. It would be open to the Customs authorities to satisfy themselves about the fulfillment of such export obligation on the basis of other export related documents also - matter remanded to the original adjudicating authority with a direction to undertake verification of the export documents and to satisfy about the fulfillment of the said obligation - appeal allowed by of remand.

Summary

Issues: Violation of exemption notification conditions, demand of Customs duty, appeal against order, fulfillment of export obligation, submission of export documents, remand to original adjudicating authority.

In the case before the Appellate Tribunal CESTAT NEW DELHI, the appellant had imported inputs under an advance license under exemption notification No. 93/2004-Cus dated 10.9.2004 at nil rate of duty, subject to fulfilling export obligations and conditions. Customs authorities found the appellant violated conditions by not submitting the Export Obligation Discharge Certificate (EODC) from the DGFT, resulting in a demand of ?24 lakh Customs duty and penalties. The appeal challenged the order-in-original upholding the duty demand and penalties, leading to the tribunal's review.

During the hearing, the appellant's counsel argued that although the export obligation was fulfilled with submitted shipping bills, they faced challenges obtaining the EODC due to a missing license number in the export documents. The Revenue's representative supported the original order, emphasizing the appellant's obligation under the advance license terms to fulfill export requirements and provide necessary documents to the DGFT for EODC issuance.

The tribunal observed that while the appellant admitted the oversight in not including the license number in export documents, the notification did not mandate proving export obligation fulfillment solely through EODC. Customs authorities could verify compliance using other export-related documents. Therefore, the tribunal set aside the impugned order and remanded the case to the original adjudicating authority for verification of export documents to confirm fulfillment of obligations, allowing the appellant to present all relevant documents. The authority retained the right to demand Customs duty if the appellant failed to demonstrate compliance.

Ultimately, the tribunal overturned the impugned order, disposing of the appeal through remand, providing the appellant with an opportunity to establish fulfillment of export obligations through proper documentation, subject to Customs duty demands if requirements were not met. The decision aimed to ensure a fair assessment of the situation based on the relevant legal provisions and documentation.