2017 (6) TMI 1010 - AT - Customs

Joint and several basis demand - failure to fulfill export obligation - Exemption under N/N. 49/2000-Cus dated 27/04/2000 - the department has issued a show-cause notice alleging that the appellants have not fulfilled the export obligation inasmuch as the car imported under EPCG was not used for earning foreign exchange, no log book was maintained - Held that - This Tribunal has consistently held in various judgements that any demand of duty cannot be confirmed against various persons on jointly and severally basis - the matter needs to be remanded to the original adjudicating authority to decide against whom the demand can be made - appeal allowed by way of remand.

Summary

Issues:
1. Joint and several confirmation of demand against multiple persons.
2. Fulfillment of export obligation under EPCG scheme.
3. Validity of EODC certificate and customs actions.

Analysis:
1. The appellant imported a "Toyota Land Cruiser Parado Car" under the EPCG scheme but was alleged to have not fulfilled the export obligation. The customs demanded duty forgone at the time of import and confiscated the car with a redemption option of ?3 lakhs. Penalties were imposed on the appellant, the Managing Partner, and the buyer of the car. The appellants challenged this order-in-original.

2. The appellant's counsel argued that the demand cannot be confirmed jointly and severally against multiple persons, citing various judgments. He emphasized that the EODC certificate was issued by the DGFT, and the bond and bank guarantee were canceled by the customs authorities after the export obligation was fulfilled. The counsel contended that the earning of foreign exchange from hotel business activities, such as room rent, was acceptable under the EPCG scheme. The Revenue, represented by the Assistant Commissioner, reiterated the findings of the impugned order.

3. The Member (Judicial) observed that confirming the demand jointly and severally against multiple persons is not permissible as per various judgments, including the case of Krishna Kumar Gupta. The impugned order was deemed unsustainable on this ground alone. The matter was remanded to the original adjudicating authority to determine against whom the demand should be made. The authority was instructed to consider all correspondence from the DGFT regarding the export obligation, the EODC certificate, and the cancellation of the bank guarantee by customs. The issues were kept open, and the appeal was allowed by way of remand to the original adjudicating authority.