2017 (10) TMI 92 - AT - Customs

Violation of import condition - import of certain capital goods as an STPI unit undertaking to export services as per the license granted to them - SCN was issued to the appellant for demand of the customs duty as appellant could not produce any evidence in respect of exports made by them - Held that - In the absence of any documents even before the Tribunal to indicate that they have complied with the obligation of export, the impugned order of the 1st Appellate Authority is correct - appeal dismissed - decided against appellant.

Summary

Issues:
1. Failure to comply with export obligations leading to demand of customs duty, interest, confiscation, redemption fine, and penalty.
2. Appellant's lack of response to show cause notice and failure to produce evidence of compliance with conditions for duty exemption.
3. Upholding of the order-in-original by the 1st Appellate Authority based on non-compliance with export obligations and duty exemption conditions.
4. Appellant's defense of economic recession not considered relevant in the context of duty exemption benefits.
5. Rejection of the appeal by the Tribunal due to lack of merit in challenging the 1st Appellate Authority's order.

Analysis:
1. The Tribunal noted that the appellant, an STPI unit, imported capital goods under the condition of exporting services as per the granted license. However, a show cause notice was issued as the appellant failed to provide evidence of fulfilling export obligations, leading to demands of customs duty, interest, confiscation, redemption fine, and penalty. The 1st Appellate Authority upheld these demands as the appellant did not contest the grounds for duty demand and penalties, failing to comply with the conditions of the duty exemption notification (Notification No. 52/2003-Cus).

2. Despite the appellant's lack of response to the show cause notice and failure to appear before lower authorities with supporting documents, the Tribunal found the 1st Appellate Authority's decision appropriate. The appellant's inability to demonstrate compliance with export obligations and duty exemption conditions, coupled with the non-renewal of the customs bonded warehouse license, strengthened the case against them. The Tribunal emphasized the importance of documentary proof to evidence fulfillment of export obligations under the relevant Notification.

3. The Tribunal highlighted the appellant's argument of economic recession as irrelevant in the context of duty exemption benefits. Citing a similar case from the Hon'ble High Court of Delhi, the Tribunal emphasized that business challenges or plans going awry cannot justify availing duty exemptions. Importers cannot evade duty obligations based on business performance or unforeseen circumstances. The Tribunal reiterated that duty exemption is a statutory levy not conditioned on business success or failure, holding the appellant liable for duty payment and associated consequences.

4. Ultimately, the Tribunal found no grounds to interfere with the well-drafted order of the 1st Appellate Authority. Considering the appellant's failure to meet export obligations, lack of documentary evidence, and the statutory nature of duty exemption, the Tribunal rejected the appeal as lacking merit. The judgment was pronounced and dictated in open court, affirming the decision based on the legal principles and factual circumstances presented in the case.