2017 (9) TMI 907 - AT - Customs

100% EOU - import of equipment availing benefit of N/N. 153/93-CUS dated 13/08/1993 - appellant has failed to fulfill their export obligation under Notification - auction - sole contention of the appellant is that as they could not repay the loan of the Vijaya Bank and bank took over the possessing property which has been auctioned - Held that - the auction took place on 05/12/2011, whereas the appellant intimated to the Department that proceedings are going with the Debt Recovery Tribunal only on 04/05/2012 which is almost six months after the auction of the land and building with installed of the equipments in question. Admittedly there were lapses on the part of the appellant, as appellant fail to inform the Department immediately when they were declared NPA by the bank. Further, it is a fact on record that appellant has failed to discharge their export obligation, in that circumstances duty is rightly demanded on the goods in question which were imported duty free. The equipments in question are held liable for confiscation as these equipments did not use for intended purpose - As goods has been confiscated, the same is the property of the Revenue and the goods can be redeemed on payment of redemption fine as imposed in the impugned order. Penalties - Held that - the appellants has failed to discharge their export obligation in terms of N/N. 153/93-CUS dated 13/08/1993, in that circumstances, the penalties are imposable on the appellants - the penalties imposed on the appellants are on higher side, therefore, penalties on the appellant M/s Ishan System Pvt. Ltd. is reduced to ₹ 15 lakhs and ₹ 1 lakh in the case of Shri Rukum Singh Yadav, Director of the main appellant. Appeal allowed - decided partly in favor of appellant.

Summary

Issues:
Appeal against duty demand, confiscation of goods, redemption fine, penalties imposition.

Analysis:
The case involved an appeal against an order demanding duty, confiscating goods, and imposing penalties on the appellants for failing to fulfill export obligations. The main appellant, a 100% EOU, imported equipment duty-free under a specific notification but failed to discharge export obligations. The appellant's property, where the imported equipment was installed, was auctioned due to loan default, leading to duty demand. The appellant argued that circumstances beyond their control prevented export obligation fulfillment, citing precedents. The Tribunal noted lapses in informing authorities promptly and upheld duty demand due to non-compliance. The appellant's reliance on precedents was dismissed as not applicable to the case. The equipment was held liable for confiscation as not used for the intended purpose. The goods could be redeemed on payment of a fine. Penalties were imposed due to export obligation non-fulfillment, with a reduction for being on the higher side. The penalties were reduced to ?15 lakhs for the main appellant and ?1 lakh for the director. The appeals were disposed of accordingly.