2018 (8) TMI 1123 - HC - Customs

Compensation fee for extension of time to complete the export obligation - DEEC licence - Whether the petitioner is required to pay a sum of ₹ 12,43,872/-, being the compensation fee for being entitled for extension of time to complete the export obligation in terms of the advance authorisation permission dated 04.07.2012? Held that - The extension of time was directed to be granted prospectively for 6 months from the date of issuance of the order to be passed by the second respondent. Now the present impugned order has been passed on 28.03.2018 on a totally different ground stating that the petitioner should pay a total sum of ₹ 12,43,872/-. Unfortunately, the respondent Department has lost sight of the fact that the initial application for extension of time remained undisposed of and was kept pending though the petitioner had remitted the composition fee as early as on 08.10.2014, being a sum of ₹ 22,212/- and once again the very same amount was remitted by the petitioner on 20.12.2017. Therefore, at this juncture, directing the petitioner to remit composition fee till the period 30.09.2018 is wholly illegal and without jurisdiction. Since the application for extension of time having not been rejected and order has been passed granting extension of time on 19.01.2018, which was interfered only with regard to the date of extension, now the respondent Department cannot go back on what they have said in their order dated 19.01.2018 under the pretext of demanding higher composition fee - the impugned order demanding additional sum of composition fee over and above the amount already remitted by the petitioner is without jurisdiction and illegal - Petition allowed.

Summary

Issues:
1. Extension of time for export obligation under advance authorisation permission.
2. Demand for additional composition fee by the respondent Department.

Extension of Time for Export Obligation:
The petitioner sought extension to complete the export obligation as per advance authorisation permission dated 04.07.2012, initially due by 31.07.2014. Despite submitting the required composition fee, the application for extension remained pending. Subsequently, the Customs Department encashed the Bank Guarantee due to non-compliance, leading to a show-cause notice under the Foreign Trade Act. The petitioner's representation seeking extension was not promptly addressed, resulting in legal challenges and court orders directing a review. The court emphasized the need for a realistic approach in granting extensions, highlighting the importance of compliance and the removal of the petitioner's name from the Denied Entry List.

Demand for Additional Composition Fee:
The respondent Department demanded a significant sum of &8377; 12,43,872/- from the petitioner, despite the petitioner having already remitted the composition fee twice, on 08.10.2014 and 20.12.2017, totaling &8377; 22,212/-. The court found this demand unjustified and beyond jurisdiction, suggesting it was an attempt to circumvent previous court directions. The court ruled the demand for additional fee as illegal and directed the respondent to acknowledge the payments made by the petitioner and grant the extension of time prospectively. The court also noted the Customs Department's communication regarding the encashment of the Bank Guarantee, ensuring the revenue's interest was protected. The respondent was given four weeks to comply with the court's directions.

This detailed analysis of the judgment addresses the issues of extension of time for export obligation and the demand for additional composition fee, providing a comprehensive overview of the legal proceedings and the court's rulings in each aspect.