2019 (2) TMI 1120 - AT - Customs

Duty free import of goods under DEEC scheme - non-fulfillment of export obligation - non-submission of EODC certificate - contravention of N/N. 43/2002 dt. 19/04/2002 - demand of duty with interest - confiscation - redemption fine - penalty - Held that - It is not disputed that the appellant has not fulfilled and has not realized the foreign exchange and has also not followed the conditions as prescribed in N/N. 43/2002. Tthe submission of EODC issued by JDFT is only a procedural condition and if the appellant can prove by way of other corroborative evidences the factum of export and foreign exchange realization, then the benefit of notification cannot be denied to them - since in the present case, the only prayer of the appellant is for dropping the interest and penalty in view of the facts and circumstances of the present case, considering that appellant was a small time manufacturer and he has already closed down his business and has paid the demand despite the fact that he has fulfilled the export obligation and realized the foreign exchange. The demand of interest and imposition of penalty is not warranted - other part of impugned order upheld - appeal allowed in part.

Summary

Issues:
- Non-fulfillment of export obligation under DEEC scheme
- Allegation of non-submission of EODC certificate
- Confiscation of goods and imposition of fines and penalties
- Appeal against Order-in-Original before Commissioner(Appeals)
- Dispute regarding the procedural requirement of EODC certificate
- Appellant's request to set aside interest and penalty

Analysis:
The appellants, engaged in the manufacture and export of monumental granites, filed appeals against a common impugned order passed by the Commissioner(Appeals) rejecting their appeals and upholding the Order-in-Originals due to non-fulfillment of export obligations and non-submission of EODC certificate. The Assistant Commissioner confirmed the duty demand, imposed interest, confiscated goods, and levied fines and penalties under the Customs Act. The appellant contended that the impugned order lacked legal sustainability, as they had fulfilled export conditions as per Notification No.43/2002, arguing that non-submission of EODC was a procedural requirement and not a substantive condition. The appellant cited legal precedents to support their case and requested leniency in setting aside interest and penalties.

Upon hearing both sides and examining the records, the Tribunal found that the demand was based solely on the non-submission of EODC to prove export and foreign exchange realization. While acknowledging the procedural nature of the EODC requirement, the Tribunal emphasized that if the appellant could provide other evidence of export and foreign exchange, the benefit of the notification should not be denied. Considering the appellant's circumstances, including ceasing business operations and payment of confirmed demands despite fulfilling export obligations, the Tribunal concluded that the imposition of penalties and interest was unwarranted. Consequently, the Tribunal set aside the penalties and interest, confirming only the duty demand, and partially allowed the appeals. The operative part of the order was pronounced in open court on 03/01/2019.