2014 (8) TMI 359 - AT - Customs

Waiver of pre deposit - Import of BMW cars under EPCG scheme - tourist purposes - Non maintenance of books of accounts - Lack of evidence - Held that - there is no material available that the imported cars were used for tourist purposes. The Hon ble Delhi High Court in the case of Interglobe Enterprises 2006 (1) TMI 145 - HIGH COURT OF DELHI held that in the case of import of the cars under EPCG Scheme, it was observed that while capital goods may or may not be capable of generating convertible foreign exchange by their independent use, least the importer must demonstrate is that the goods were put to use for business activity for which the same were imported. Prima facie there is violation of exemption notification insofar as the applicant failed to produce any evidence that the payments were received in freely convertible foreign currency for services rendered to use of the cars. Hence the applicant failed to make out a prima facie case for waiver of pre-deposit of the entire amount of duty along with interest and penalty. - entire amount of duty directed to be pre-deposited - interest and penalty stayed - stay granted partly.

Summary

Issues:
1. Condonation of delay in filing appeals.
2. Waiver of pre-deposit of differential Customs Duty, interest, and penalty for imported cars under EPCG Scheme.

Condonation of Delay in Filing Appeals:
The applicants sought condonation of a 37-day delay in filing appeals due to inadvertently filing the appeal with the Commissioner (Appeals) instead of the Tribunal. The applicant, based in Delhi, filed the appeal with the Tribunal immediately upon realizing the mistake. The Tribunal, after considering submissions, condoned the delay as the appeal was inadvertently filed within the statutory time limit. Both applications for condonation of delay were allowed.

Waiver of Pre-Deposit of Customs Duty for Imported Cars:
The case involved the import of three BMW cars under the EPCG Scheme for tourist purposes only. However, Customs Officers found that the cars were used for private purposes, leading to their seizure. The applicant failed to provide evidence of receiving payments in freely convertible foreign currency for services rendered through the cars. The Tribunal noted that the cars were not used exclusively for tourist purposes and lacked evidence of foreign exchange earnings. Rulings from previous cases were cited to emphasize the importance of meeting export obligations under the EPCG Scheme. As a result, the Tribunal directed the applicant to pre-deposit the entire duty amount, allowing encashment of the Bank Guarantee for collection. Pre-deposit of interest and penalty was waived upon compliance, with recovery stayed until appeal disposal.

Conclusion:
The Tribunal granted condonation of the delay in filing appeals due to inadvertent errors. However, in the case of waiver of pre-deposit for imported cars under the EPCG Scheme, the Tribunal found non-compliance with the scheme's requirements regarding the use of vehicles for tourist purposes and receipt of payments in foreign currency. As a result, the applicant was directed to pre-deposit the full duty amount, with encashment of the Bank Guarantee allowed for collection. Compliance was required within eight weeks, with the waiver of interest and penalty contingent upon deposit and recovery stayed until appeal resolution.