2023 (10) TMI 610 - SCH - Customs

Non-determination of fulfillment of export obligation certificate - HELD THAT - This Court is of the opinion that the larger interest of justice will be subserved if the impugned order is sustained except to the extent of the slight modification - No substantial question of law arises. The direction to pay penalty imposed upon the Directors/employees of the appellant(s)-Company to the extent of 25 lacs in aggregate is hereby set aside. The balance if any may be paid after adjusting the amounts encashed through the Bank Guarantee and the amounts paid subsequently by the appellant(s)-Company. Appeal allowed in part.

Summary

Issues Involved:
The interpretation of export obligation certificate requirement in customs cases, imposition of penalty on directors/employees of the company, adjustment of penalty amount with bank guarantee and subsequent payments.

Interpretation of Export Obligation Certificate Requirement:
The Supreme Court considered the interpretation favored by the majority of the Customs, Excise and Service Tax Appellate Tribunal regarding the export obligation certificate. The Court held that the fulfillment of the export obligation certificate was not determinative per se based on the facts of the cases. However, the Court found that the impugned order could be sustained with slight modifications in the interest of justice. The Court concluded that no substantial question of law arises from this issue.

Imposition of Penalty on Directors/Employees:
The Court set aside the direction to pay a penalty of Rs. 25 lakhs in aggregate imposed on the directors/employees of the appellant company. It was ordered that the balance, if any, should be paid after adjusting the amounts encashed through the Bank Guarantee and subsequent payments made by the appellant company. This decision was made in the specific circumstances of the cases and will not be determinative of the appellant's rights in any other pending proceedings, keeping all rights and contentions open.