2023 (6) TMI 962 - HC - Customs

Export Promotion Capital Goods Scheme (EPCG) for import of capital goods - alleged violation/non-compliance of the licence conditions - HELD THAT - The petitioner has stated in affidavit that they were unable to procure the licence at the relevant point in time. However, subsequent to the passing of the impugned order on 6-2-2013, the petitioner has made a representation before the Joint Director General of Foreign Trade on 12-5-2014 bringing to his notice that the EPCG licence was never used for any import clearance. The petitioner has surrendered the original licence. Thus what appears to have transpired is that the original licence has been procured by the petitioner, though after passing of the impugned order-in-original. The original customs TRA issued by the Chennai air Customs to Chennai SEA Customs and non-utilization certificate in original are stated to have been produced before the authority - the Asstt. Commissioner of Customs (EPCG) vide communication dated 5-5-2014 has stated that the TRA enclosed has not been registered in the system but has not denied the surrender of both the original EPCG licence and non-utilisation certificate. While sustaining impugned order-in-original dated 6-2-2013, the petitioner is permitted to appear before the Joint Director General of Foreign Trade, Chennai on Monday, the 30th of January, 2023 at 10.30 a.m. without awaiting any further notice in this regard, to pursue its representation filed on 12-5-2014 - Petition allowed.

Summary

Issues: Challenge to order-in-original under EPCG scheme for non-compliance, surrender of original licence, verification of non-utilization certificate, levy of penalty, recovery action, and directions for further proceedings.

The High Court of Madras heard a case where a company, the petitioner, challenged an order-in-original issued by the Joint Director General of Foreign Trade regarding the Export Promotion Capital Goods Scheme (EPCG). The petitioner had applied for a licence under the EPCG for importing capital goods and was issued a licence as a service provider. The licence required the petitioner to produce and supply electricity generated from the imported goods using conventional fuel to the consumer, as per specified conditions within 8 years. A show cause notice was issued for alleged non-compliance of the licence conditions. The petitioner claimed non-utilization of the licence and sought time to provide evidence. However, the impugned order was passed based on the alleged violation. The petitioner later surrendered the original licence and represented that it was never used for import clearance.

After reviewing the facts, the court noted that the original licence was obtained by the petitioner post the impugned order. The Asstt. Commissioner of Customs confirmed the non-registration of the TRA but did not deny the surrender of the original licence and non-utilization certificate. The court, while upholding the impugned order, allowed the petitioner to appear before the Joint Director General of Foreign Trade to pursue the representation and directed verification of the records to determine the validity of the EPCG licence and non-utilization certificate. If the authority confirms the non-utilization of the licence, the penalty will be dropped.

Regarding another writ petition concerning recovery action for the penalty imposed, the court directed that the recovery action would be subject to the orders passed by the Joint Director General of Foreign Trade in line with the previous directions. The court concluded by ordering the writ petitions as mentioned without any costs, and the connected miscellaneous petitions were closed.