1999 (3) TMI 207 - AT - Customs

Summary

Issues:
- Confiscation of imported items under Customs Act
- Violation of EPCG scheme conditions
- Relocation of imported machines without prior permission
- Regularization of post-importation condition under EPCG scheme

Confiscation of Imported Items under Customs Act:
The appeal challenged an Order-in-Original confiscating imported items under Section 111(d) of the Customs Act, 1962. The Commissioner of Customs, Trichy, had ordered the confiscation of items imported under Customs Notification No. 110/95-Cus., as amended, due to the machines not being installed in the specified premises but in a sister concern. A fine of Rs. 5 lacs and a penalty of Rs. 2 lacs were imposed under Section 112 of the Customs Act.

Violation of EPCG Scheme Conditions:
The central issue revolved around the violation of the Export Promotion Capital Goods (EPCG) scheme conditions. The machines imported were not installed in the designated premises as per the EPCG scheme sanctioned by the Directorate General of Foreign Trade (DGFT). The relocation to a sister concern without prior authorization led to the violation of the Customs Notification and subsequent confiscation by the Commissioner.

Relocation of Imported Machines Without Prior Permission:
The appellants argued that post facto approval was obtained from the DGFT for relocating the imported machines to the sister concern. Although no prior permission was sought from the Assistant Commissioner of Customs, the appellants contended that the relocation was regularized by the DGFT under the EPCG scheme, thereby fulfilling all conditions post-importation. The relocation was deemed a procedural lapse but was regularized by the DGFT.

Regularization of Post-Importation Condition under EPCG Scheme:
The Appellate Tribunal noted that the issue was a post-importation condition under the EPCG scheme, which was subsequently regularized by the DGFT. While the relocation without intimation to the Assistant Commissioner of Customs was a procedural error, the Tribunal recognized that the DGFT was the final authority for sanctioning under the EPCG scheme. The post facto regularization by the DGFT rendered the relocation compliant with the Customs Act, leading to the setting aside of the Order-in-Original and allowing the appeal with consequential relief.