2002 (12) TMI 143 - AT - Customs

Summary

Issues involved:
The judgment deals with the issues of non-fulfillment of export obligation under the EPCG Scheme, confiscation of imported goods, imposition of penalties under Sections 111(o) and 112A of the Customs Act, differential duty demand, and misuse of imported goods.

Non-fulfillment of Export Obligation:
The appellants imported capital goods under the EPCG Scheme but failed to meet the export obligation stipulated in the Exim Policy and customs notification. The Commissioner found that the importers did not make any exports and suppressed information about non-fulfillment of export obligation. The goods were seized, and a show cause notice was issued.

Confiscation and Penalties:
The Commissioner ordered the confiscation of imported goods valued at Rs. 8.23 crores under Section 111(o) of the Customs Act and imposed penalties under Section 112A. However, the Tribunal found that the drastic measures of confiscation and penalty were uncalled for based on previous decisions. The Tribunal highlighted the need for a completion of installation certificate before confiscation.

Penalties Imposed:
The appellants pleaded inability to compete due to high costs and approached BIFR for rehabilitation. The Tribunal found that the penalties imposed were not justified as the circumstances were beyond the control of the importers. The penalties were set aside, considering the efforts to promote trade and exports by the government.

Differential Duty Demand:
The Tribunal upheld the differential duty demand along with interest at 24% as the appellants admitted their inability to meet export contracts. The liability of duty with interest was confirmed based on the EPCG policy provisions for duty recovery in such cases.

Misuse of Imported Goods:
The Tribunal did not find any evidence of misuse of imported goods by the appellants. The liability of confiscation and heavy penalties based on the importers' attitude towards the concerned department was not upheld. The judgment confirmed duty demands but set aside confiscation, redemption fine, and penalties.

In conclusion, the Tribunal confirmed duty demands with interest but set aside confiscation, redemption fine, and penalties imposed on the importers, considering the circumstances and previous decisions.