2019 (8) TMI 1004 - AT - Customs

EPCG Scheme - denial of benefit on the ground that coverage under two benefits was claimed. - Exemption under notification no. 21/2002-Cus dated 1st March 2002 along with notification no. 6/2002-C.Ex dated 1st March 2002 - it is alleged that the duty of ₹ 4,42,56,732/- foregone on these cranes had not been debited in the licence issued under the export promotion capital goods scheme of the Foreign Trade Policy HELD THAT - As the two exemptions which were cited in the bill of entry are mutually exclusive, only the eligible concession/exemption could have been made extended to the import by the assessing officer. From the records, we find that such an elimination has not been carried out despite which the adjudicating authority has proceeded on the assumption of lack of eligibility for exemption under notification no. 21/2002-Cus dated 1st March 2002 along with notification no. 6/2002-C.Ex dated 1st March 2002. It also appears that the absence of debit of the entire duty saved in the licence issued under the export promotion capital goods scheme was held to suffice for recovery of differential duty - The impugned order reasons that the amended licence was not produced before the assessing officer with deliberate intent to evade liability. That conclusion, however, did not prevent the adjudicating authority from taking notice that the importer did not utilize the unutilized amount of duty saved limits for effecting any other import or was deficient in fulfilling export obligation to the extent of duty actually saved by resort to the scheme. We find ourselves unable to concur with the adjudicating authority that the benefit of exemption under notification no. 97/2004-Cus dated 17th September 2004 should be rejected peremptively merely because coverage under two benefits was claimed. It was for the adjudicating authority to determine, in the absence of such exercise by the assessing officer at the time of clearance, the eligibility for import under the scheme for which licence of competent authority was furnished. Any consequence, in terms of duty, confiscation or penalty, should have emanated from conformity, or lack thereof, with the said scheme - matter remanded back to the original authority to complete the process of adjudication on the lines indicated.

Summary

Issues:
Import of 'harbour mobile cranes' under the 'export promotion capital goods scheme' - Allegations of duty foregone and limited permissible debit - Exemption claims under various notifications - Failure to debit full duty saved amount - Denial of benefit, confirmation of differential duty, and imposition of penalties - Eligibility for exemptions under different notifications - Lack of eligibility assessment by assessing officer - Non-utilization of duty saved limits for other imports or export obligations - Rejection of exemption under notification no. 97/2004-Cus - Remand of the matter for adjudication - Setting aside penalties under sections 114A and 114AA of Customs Act, 1962.

Analysis:
The appeals in this case arose from an order regarding the import of 'harbour mobile cranes' under the 'export promotion capital goods scheme.' The primary issue was the duty foregone on the cranes and the limited permissible debit, leading to allegations against the importer. The importer had initially sought exemptions under different notifications but faced challenges regarding the duty saved amount not being debited in the license as per the scheme. The impugned order found the importer ineligible for benefits due to the failure to debit the full duty saved amount, leading to the confirmation of a differential duty and imposition of penalties.

During the proceedings, the appellants claimed a subsequent enhancement in the license to cover the duty saved shortfall, fulfilling export obligations. However, the impugned order concluded that importing under multiple notifications implied seeking ineligible benefits and established suppression by the importer. The order denied the benefit claim, confirmed the differential duty, imposed penalties, and set aside exemptions under certain notifications.

The Tribunal observed that the assessing officer failed to determine the eligibility for exemptions under different notifications, leading to incorrect assumptions by the adjudicating authority. The failure to produce the amended license was seen as deliberate evasion, but the importer's non-utilization of duty saved limits for other imports or export obligations was not considered. Consequently, the Tribunal set aside the impugned order, remanding the matter for proper adjudication in line with the scheme's requirements.

Additionally, the penalties under sections 114A and 114AA of the Customs Act, 1962 were set aside to be determined afresh by the original authority in accordance with the law. The Tribunal emphasized the importance of conformity with the scheme for duty, confiscation, or penalty consequences, highlighting the need for a thorough eligibility assessment by the adjudicating authority.