2024 (5) TMI 473 - AT - Customs

100% EOUs - delay in fulfilment of export obligations - Customs Warehousing Licence for warehousing manufacturing and export of software - liability to pay duty along with interest - HELD THAT - The appellant submits that there were circumstances beyond their control for the delay in fulfilment of their export obligation. Accordingly they applied for extension of the time-limit with the Development Commissioner STPI which was considered by the Development Commissioner vide order dated 12.03.2010. The validity of the extension was given retrospectively. Thus we observe that the appellant was granted time for another period of five years from 5th May 2008 to fulfil their export obligation. Hence the impugned order dated 30.04.2010 is premature. The ld. adjudicating authority could have waited for the final decision of the Development Commissioner STPI before passing the order. Since the appellant has received extension for another period of five years with retrospective effect we hold that the demand confirmed in the impugned order is not sustainable. As the confiscation of the goods and the demand of duties are not sustainable the question of imposition of redemption fine and penalty does not arise. Thus we set aside the impugned order and allow the appeal filed by the appellant.

Summary

Issues involved:
The issues involved in this case are non-fulfillment of export obligations leading to the imposition of duties, redemption fine, and penalty, and the subsequent appeal against the impugned order.

Summary:

Issue 1: Non-fulfillment of Export Obligations
The appellant, M/s. Jayashree Infotech Consultants, was granted a Customs Warehousing Licence for warehousing, manufacturing, and exporting software but failed to meet the required export obligations and conditions stipulated in the Customs Notification. The appellant faced difficulties in setting up 100% EOUs and could not fulfill the obligations within the initial five-year period. However, they applied for an extension, which was granted retrospectively by the Development Commissioner, STPI. The Tribunal observed that the impugned order was premature as the appellant received an extension for another five years to fulfill their export obligations. Therefore, the demands raised in the impugned order were deemed unsustainable, leading to the setting aside of the order and allowing the appeal.

Decision:
The Tribunal set aside the impugned order and allowed the appeal filed by the appellant, as the demands raised in the order were deemed unsustainable due to the retrospective extension granted by the Development Commissioner, STPI for fulfilling export obligations.