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Issues:
Interpretation of Customs Notification regarding export obligation under EPCG Scheme. Analysis: The appellants imported Second-hand plant under the EPCG Scheme and were required to fulfill the export obligation equivalent to four times the CIF value of the goods imported within 5 years. Due to unforeseen circumstances, they could only complete 49% of the export obligation. The original authority denied the benefit of the Notification and demanded full duty liability, which was confirmed by the Commissioner of Customs (Appeals). The learned Advocates for the appellants argued that since they partially fulfilled the export obligation by exporting 41% within 5 years, the provision to be applied should be Para 4 of the Notification, not Para 5 as done by lower authorities. They cited a previous Tribunal case where it was held that Para 4 should be invoked in cases of partial fulfillment of export obligation. The learned SDR representing the Revenue agreed that the issue was covered by the previous Tribunal decision. The Tribunal analyzed the submissions and found that full duty can only be demanded along with interest if there is a failure to discharge a minimum of 25% of the export obligation prescribed for any particular year for 3 consecutive years. In this case, the appellants achieved varying percentages of export obligation each year, with 100% in the second year, 78.33% in the third year, 15.56% in the fourth year, and 27.27% in the fifth year. Therefore, Para 5 was deemed inapplicable, and duty liability should be computed using Para 4, considering the partial obligation completed. The Tribunal concluded that the appellants were liable to pay a lesser amount compared to what the department had realized. Citing the previous case, the Tribunal allowed the appeal and granted relief, potentially in the form of a refund for the excess amount recovered by the department. The decision was pronounced in open court at the conclusion of the hearing.
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