2019 (9) TMI 537 - AT - Customs

Recovery of Customs Duty - Section 143 (3) readwith Section 142 of the Customs Act, 1962 - the basic ground on which the customs duty has been confirmed and ordered for recovery, is for the reason that the appellant have failed to adduce the evidence of fulfillment of their export obligation under advance authorization - HELD THAT - The claim of the appellant that they have fulfilled the export obligation with regard to the advance authorization dated 10 January 2013 and, therefore, there is no cause for demanding customs duty against the duty free imports effected by them under the above-mentioned advance authorization - it will be proper if the original Adjudicating Authority considers the claim made by the appellant regarding fulfillment of the export obligation and decide the matter afresh. Matter remanded for denovo adjudicating for taking into account the claims of export obligation fulfillment made by the appellant - appeal allowed by way of remand.

Summary

Issues:
- Confirmation of customs duty for recovery under the Customs Act, 1962
- Imposition of interest and penalty under the Customs Act, 1962
- Failure to provide evidence of export obligation fulfillment
- Issuance of show cause notice by DGFT for non-fulfillment of export obligation
- Appeal against the order-in-original

Confirmation of Customs Duty and Imposition of Interest and Penalty:
The appellant filed an appeal against an order confirming customs duty amounting to ?50,04,083 for recovery under Section 143(3) read with Section 142 of the Customs Act, 1962. Additionally, interest was demanded, and a penalty of ?5 lakhs was imposed under Section 112 of the Customs Act, 1962. The appellant imported goods without paying customs duty based on an Advance Authorization Licence. The customs duty was confirmed due to the alleged failure of the appellant to fulfill their export obligation within the specified time frame.

Failure to Provide Evidence of Export Obligation Fulfillment:
The appellant imported goods under the Advance Authorization Licence, which entitled them to duty-free import of raw materials provided they fulfilled their export obligation within a specified period. The customs duty was confirmed as the export period of the authorization expired, and the appellant allegedly failed to produce evidence of fulfilling the export obligation. A show cause notice was issued by the Joint Director, DGFT, questioning the non-fulfillment of the export obligation.

Appeal Against the Order-in-Original:
The appellant presented a redemption letter certifying the fulfillment of export obligations under the relevant authorization. Despite this, the show cause notice issued by DGFT remained pending. The Tribunal observed that the confirmation of customs duty was primarily due to the lack of evidence regarding export obligation fulfillment. They directed the original Adjudicating Authority to reconsider the matter, taking into account the appellant's claim of fulfilling the export obligation. The Tribunal set aside the order-in-original and remanded the matter for fresh adjudication within two months, emphasizing the appellant's cooperation in providing necessary documents for a prompt decision.

This judgment highlights the importance of providing evidence of fulfilling export obligations under Advance Authorization Licences to avoid customs duty confirmation. It also underscores the need for thorough consideration of claims and cooperation with authorities during adjudication processes.