2017 (7) TMI 587 - AT - Customs

DEEC scheme - fulfillment of export obligation - whether the appellant is required to discharge the differential customs duty in view of the fact that they had not completed the export obligation when they procured the DEEC licences from the Govt of India? - Held that - appellant was correct in bringing to our notice that the DEEC book which is issued by the authorities contains two portions one for the import and another for the export. The Customs Officers meticulously make entries of the imports made by the appellant and also meticulously recorded the exports made by them and countersigned the same with the stamp. The said entries clearly indicate exports made by appellants against such licenses. The adjudicating authority has failed to consider this evidence which is in their hand when the DEEC books were produced for registration/ incorporating the imports and exports. The appellant has recalculated his duty liability in the submissions made by them in the absence of any relevant documents made available to us we are unable to verify the authenticity of the same. For the limited purpose of checking the calculations put forth by the appellant for arriving on the duty liability we remit the matter back to the adjudicating authority only for checking the calculations done by the appellant for discharging the differential customs duty. Interest - penalty - Held that - there is no question of demand of interest or imposition of penalty on the appellant. Appeal allowed in part and part matter on remand - decided in favor of appellant.

Summary

Issues:
Whether the appellant is required to discharge the differential customs duty due to incomplete export obligation when procuring DEEC licenses from the Government of India.

Analysis:
The case involved the appellant procuring advance licenses for import, with the department demanding differential customs duty as export obligation was not completed. The original order upheld the duty demand, penalties, and confiscation. The Tribunal remanded the matter for recalculation, directing proportional reduction for unfulfilled export obligations. The Apex Court later allowed the appeal on various issues, including no interest demand, no penalty imposition, and limitations on anti-dumping duty. The appellant argued for duty liability based on inputs and partial exports, supported by DEEC book entries. The DR argued for full export obligation fulfillment for duty relief, citing strict interpretation of notifications. The Tribunal found errors in the adjudicating authority's conclusion, emphasizing the need to follow Tribunal directions for proportional reduction based on partial exports.

The Tribunal acknowledged the appellant's evidence of partial exports in the DEEC book, which the adjudicating authority failed to consider. The case was remitted back for verifying the appellant's duty liability calculations. Following the Apex Court's decision, no interest or penalty could be demanded or imposed on the appellant. The appeal was allowed to the extent contested, setting aside the impugned order and confirming duty demands only for goods imported but not used to fulfill the export obligation.

In conclusion, the Tribunal's decision favored the appellant's argument of proportional reduction for unfulfilled export obligations based on partial exports evidenced in the DEEC book. The adjudicating authority's errors were highlighted, and the matter was remitted for verifying duty liability calculations. The Apex Court's decision guided the Tribunal in disallowing interest and penalties, ultimately setting aside the impugned order and allowing the appeal in part.