2018 (1) TMI 979 - AT - Customs

Benefit of N/N. 102/2009 dated 11.09.2009 - EPCG Scheme - import of Capital goods - It was observed that instead of indigenous procurement, the appellants made imports vide Bill of Entry No.3386290 dated 03.05.2011 and 3400925 dated 04.05.2011 against the subject authorization from Chennai port whereas no import could have been made as authorization has already been invalidated for direct import - extended period of limitation. Held that - when it is not disputed that the licences had indeed been produced to the concerned officers at the time of import - from the facts on record, no irresistible evidence has been put forth to prove the charge of wilful suppression by the appellant and justification of extended period of limitation - SCN not having been issued within the normal period of limitation will have to be considered as time-barred. Appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Validity of EPCG authorization and import of capital goods against invalidated license.
2. Denial of exemption under EPCG scheme and imposition of duty and penalties.
3. Oversight by customs authorities and responsibility of importer.
4. Time-barred show cause notice and wilful suppression by the appellant.

Analysis:
1. The appellant obtained an EPCG authorization which was later invalidated at their request. Despite this invalidation, they imported capital goods against these licenses without disclosing the invalidation. The DGFT discovered this when the appellant applied for EODC and found that the imports were made against invalidated licenses. The Customs issued a show cause notice proposing confiscation of goods and penalties. The original authority denied the benefit of exemption, demanded differential duty, and imposed penalties. The Commissioner (Appeals) upheld this decision, leading to the appeal before the tribunal.

2. The appellant argued that they had sought an amendment to the authorization to invalidate it for direct import at the initial stage. They highlighted correspondence indicating consent from the supplier for import against the invalidation letter. The appellant claimed that customs clearance was allowed after submitting the necessary documents, and any contravention was not solely their responsibility. They also contended that the demand made by authorities beyond the clearance date was time-barred and not sustainable.

3. The respondent supported the impugned order, stating that oversight by customs does not absolve the importer of responsibility. It was alleged that the appellant intended to evade duty liability, and oversight by assessing officers does not excuse the importer from fulfilling obligations. The tribunal noted that while the appellant erred in clearing goods with an invalidated license, the clearance was not without oversight by assessing officers. The tribunal found that the show cause notice was time-barred due to lack of evidence of wilful suppression by the appellant, leading to the setting aside of the impugned order.

4. The tribunal concluded that there was no compelling evidence of wilful suppression by the appellant, and the extended period of limitation was not justified. As the show cause notice was time-barred, the proceedings and impugned order were set aside, and the appeal was allowed with any consequential relief as per law.