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2017 (9) TMI 905 - AT - CustomsEPCG scheme - N/N. 111/95-Cus dated 05.06.1995 - import of Capital Goods - zero rate of duty - denial on the ground that condition No. 6 of the Notification has not been fulfilled - Held that - both zero rated EPCG licences were meant for the same export products and the total utilized value of both the zero duty licences put together exceeds ₹ 20 Crores, the Committee decided to permit the appellant to retain the facility of zero duty benefit against EPCG licence dated 11.10.96. The capital goods which were imported have been put to intended use and the goods manufactured out of the same have been exported and the obligation of export has been discharged duly by the licensing authority vide letter date4d 24.10.2005. The said letter recognizes the fulfillment of export obligation under the EPCG licence dated 11.10.96 and advised the appellants to approach the customs authorities for release of B.G./LUT executed - In the present case, there is no findings that the said licences were held to be invalid by any competent authority. We are not in agreement with the findings of the original authority who declined to consider the communications issued by the licensing authority and proceeded on independent interpretation on Customs Notification, which does not stand legal scrutiny. The licence which was validated is for the said notification only. Demand set aside - appeal allowed - decided in favor of appellant.
Issues:
Eligibility for zero rate of duty under EPCG licence dated 11.10.96. Analysis: The appeal challenged the order of the Commissioner of Customs & Central Excise, Coimbatore, regarding the appellants' failure to fulfill the minimum value condition for the import of capital goods under Exim Policy 1992-97. The appellants imported goods valued at ?13.24 Crores under a licence requiring a minimum value of ?20 Crores, leading to a demand for recovery of additional duty. The original authority held the appellants ineligible for exemption due to non-compliance with the minimum value condition of the Customs Notification No. 111/95-Cys. The appellants argued that they sought permission to combine two EPCG licences to meet the threshold, which was granted by the DGFT but not accepted by the original authority. They contended that no duty was applicable before 16.09.97, and any duty post that date was duly paid. The licensing authority recognized the fulfillment of export obligations under the EPCG licence dated 11.10.96, allowing the appellants to retain the zero duty benefit. The Tribunal noted that the original authority erred in disregarding the permission granted by the licensing authority and upheld the appellants' claim for zero rate of duty. The dispute centered on the appellants' eligibility for zero rate of duty under the EPCG licence dated 11.10.96. The original authority denied the claim based on non-compliance with condition No. 6 of the Customs Notification No. 111/95. However, the DGFT permitted the appellants to retain the zero duty benefit after considering both EPCG licences collectively exceeding ?20 Crores. The Tribunal observed that the capital goods were imported, utilized, and exported as intended, with the export obligations discharged. The licensing authority acknowledged the fulfillment of obligations and allowed the appellants to continue using the licence. The Tribunal emphasized that no duty liability existed before 16.09.97, and any duty payable post that date was duly settled. The Tribunal rejected the original authority's independent interpretation of the Customs Notification, emphasizing that the licensing authority's decisions on EPCG licences should prevail unless invalidated by the specific authority. As there was no evidence of the licences being declared invalid, the Tribunal set aside the duty demand against the appellants, allowing the appeal.
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