2010 (9) TMI 196 - AT - Customs

Penalty - 100% EOU - manufacture and export of Ultra Fine Magnet Wire - they were expected to fulfill the export obligations within a period of 10 years - appellants have not been able to fulfill their proportionate export obligations - Commissioner confirmed Customs duty in respect of capital goods and raw materials imported free of duty by the appellant - Held that - note of the OIO No.66/2002-03, dt.17.3.03 passed by Development Commissioner, vacating the show cause notice, by arriving at a finding that inspite of the difficulties being faced by the appellant in international market, they have been able to achieve 192 % value addition in export - dropped the penal action against the appellant - remand the matter to Commissioner for fresh decision

Summary

Issues:
1. Application for dispensing with the pre-deposit of Customs duty and Central Excise duty confirmed by the Commissioner.

Analysis:
The appellant, a 100% EOU, failed to fulfill export obligations leading to the confirmation of Customs duty and Central Excise duty by the Commissioner. The impugned order was based on an order by the Development Commissioner indicating non-fulfillment of export obligations and value addition. The appellant challenged this order, highlighting the agreement terms and the absence of duty payment clauses for shortfalls in export performance in the initial years. The Tribunal noted a previous order vacating penal action due to significant value addition by the appellant, suggesting that the Commissioner should await the appellate authority's decision on the matter. Consequently, the Tribunal allowed the stay petition, set aside the impugned order, and remanded the case to the Commissioner for a fresh decision post the appellate proceedings outcome.

This judgment emphasizes the importance of fulfilling export obligations for EOUs and the significance of appellate proceedings in challenging decisions based on such obligations. The Tribunal's decision to remand the case showcases the need for a comprehensive review considering all relevant factors, including the outcome of appellate proceedings.