2015 (10) TMI 95 - AT - Customs

100% EOU - Benefit of Notification no. 2/95-C.E - Fulfillment of Export Obligation - Whether benefit of Notification No. 2/95-C.E. was available to appellant or not on advance DTA sales Held that -there was no dispute that appellant has registered himself as 100% EOU Permission granted to appellant by various authorities indicates that appellant has committed to authorities that he would adhere to fulfilment of export obligation, in lieu of various concessions granted to him During year 1996-97 to 1998-99, appellant being 100% EOU did not effect any exports Development Commissioner held that appellant has not exported single kilo of finished products, which was contrary to permissions granted to him as 100% EOU It was also noticed that Development Commissioner has penalized appellant for non-fulfilment of export obligation committed by him and also for reason that they have not achieved positive NFEP On face of such factual matrix, exception has been further extended by DGFT authorities by permitting appellant to clear to DTA in advance for adjustment against exports to be undertaken in future Therefore, appellant was not eligible to avail benefits of Notification No. 2/95-C.E. In view of majority decision Appeal rejected Decided against Assesse.

Summary

Issues Involved:
1. Interpretation of Notification No. 2/95-C.E. for advance DTA sales eligibility.
2. Adjustment of Notification benefits for DTA sales considering exports and foreign exchange sales.
3. Consideration of exports for DTA clearance eligibility.
4. Status of DTA permission and penalty imposition by the Development Commissioner.
5. Clearance classification under Notification No. 2/95 for goods sold with DTA permission.
6. Interpretation of show cause notice by the Development Commissioner.
7. Rejection of Notification No. 83/90-Cus. claim for not being made at import or lower authority consideration.
8. Decision on appeal rejection or remand for fact verification.
9. Upholding confiscation/penalty or setting aside based on DTA clearance permission.

Detailed Analysis:
1. The main issue revolved around the eligibility of the appellant for benefits under Notification No. 2/95-C.E. for advance DTA sales. The appellant argued that the notification did not require exports preceding DTA sales, but the Development Commissioner found non-compliance with export obligations.

2. Another point of contention was the adjustment of Notification benefits for DTA sales, considering exports and foreign exchange sales. The appellant claimed fulfillment of conditions under the notification, while the Departmental Representative highlighted non-discharge of export obligations, leading to demand confirmation.

3. The consideration of exports for DTA clearance eligibility was crucial. The appellant's failure to export any products as an EOU led to a penalty by the Development Commissioner, indicating non-compliance with export commitments and NFEP achievement.

4. The status of DTA permission and penalty imposition by the Development Commissioner was debated. The appellant's argument of achieving NFEP was dismissed due to lack of evidence convincing the authorities.

5. The classification of clearances under Notification No. 2/95 for goods sold with DTA permission was discussed. The appellant's clearance to DTA without fulfilling export obligations raised questions on deemed exports and compliance.

6. The interpretation of the show cause notice by the Development Commissioner was crucial. The Commissioner's decision to penalize the appellant for non-fulfillment of export obligations overshadowed the appellant's claims of compliance.

7. The rejection of Notification No. 83/90-Cus. claim due to not being made at import or lower authority consideration was highlighted. The lower authorities' stance on claim consideration was crucial for the case.

8. The decision on appeal rejection or remand for fact verification was based on the factual matrix and compliance issues. The lack of evidence supporting the appellant's claims led to the rejection of the appeal.

9. The final decision revolved around upholding confiscation/penalty or setting aside based on DTA clearance permission. The majority decision rejected the appeal, considering the non-compliance and lack of fulfillment of export obligations by the appellant.