2023 (11) TMI 73 - AT - Customs

Recovery of Customs Duty foregone with respect to Zero Duty EPCG Licence - simultaneously availing SHIS scheme and Zero Duty EPCG Scheme by suppressing the information of availment of SHIS Scheme in ANF 5A form - HELD THAT - The duty foregone into Zero Duty EPCG Licences was demanded through the show cause notice. Both the licences were issued before 05.06.2012. Before 05.06.2012, there was no requirement of giving an undertaking under para 4B of ANF 5A form. Therefore, the allegation of suppression in the show cause notice is not proved. The Public Notice dated 08.09.2016 is also gone through. Further, the original authority has accepted the contents of the said public notice and dropped the proposals for imposition of penalties. There are no irregularity on the part of the appellant for Revenue to recover customs duty of Rs.15,29,559/- under extended period of limitation. The impugned order set aside - appeal allowed.

Summary

Issues:
The issues involved in this case are the simultaneous availing of Status Holder Incentive Scheme (SHIS) and Zero Duty EPCG Scheme, alleged suppression of information by the appellant, recovery of customs duty, and imposition of penalties.

Simultaneous Availment of SHIS and Zero Duty EPCG Scheme:
The appellant, a manufacturer and exporter of footwear soles, was issued two Zero Duty EPCG Licences and three SHIS Licences. A show cause notice was issued alleging that the appellant simultaneously availed both schemes, contravening the relevant policies. The appellant argued that the restriction on simultaneous availing was introduced after the period in question and that they had complied with the provisions in force at that time. The Tribunal found that the allegation of suppression was not proved as the required undertaking was not mandatory before a certain date. The Tribunal also noted a public notice accepting errors in issuance of SHIS and EPCG Licences as bonafide mistakes, indicating no malafide intent on the appellant's part.

Recovery of Customs Duty and Imposition of Penalties:
The Revenue demanded recovery of customs duty of Rs.15,29,559/- from the appellant. However, the Tribunal held that there was no irregularity on the part of the appellant, especially since the original authority had accepted a public notice dropping proposals for penalties. As a result, the Tribunal set aside the impugned order and allowed the appeal in favor of the appellant.

This judgment highlights the importance of compliance with trade policies, the significance of relevant timelines for policy provisions, and the impact of public notices on decision-making in customs duty cases.