2008 (7) TMI 195 - AT - Customs

Demand, confiscation and penalty on ground of non-fulfillment of Export obligation (EO) prior to issue of SCN or prior to the adjudication by the Commissioner, the jurisdictional Development Commissioner had not given any definite finding that the appellant-company has failed to meet the EO - Moreover, appellant, is presently undergoing rehabilitation and was part of a study on sick floriculture units commissioned by APEDA hence, demand confirmed by Commissioner Customs is premature

Summary

Issues:
1. Confirmation of customs duty demand under Section 72(b) of the Customs Act.
2. Confirmation of central excise duty demand under Notification No. 136/94-CE.
3. Order of confiscation of goods under Section 111(o) of the Customs Act.
4. Imposition of penalty on the appellant-company under Section 112(a) of the Customs Act.
5. Imposition of penalties on the Managing Director and Directors under Section 112(b) of the Customs Act.

Confirmation of Customs Duty Demand:
The main issue in this case was the confirmation of customs duty demand on the appellant-company for failing to meet the export obligation within the stipulated period. The Commissioner confirmed the duty demand of Rs. 6,78,63,747 under Section 72(b) of the Customs Act, read with Notification No. 126/94-Cus. The appellant argued that the Development Commissioner had not made a decision regarding the export obligation fulfillment, and therefore, the confirmation of duty demand was premature. The Tribunal referred to a previous case and a circular stating that duty demand can only be confirmed when the Development Commissioner determines the failure to fulfill export obligations. As the Development Commissioner had not made a decision in this case, the Tribunal set aside the duty demand and remanded the matter for further adjudication.

Confirmation of Central Excise Duty Demand:
The Commissioner also confirmed the central excise duty demand under Notification No. 136/94-CE. The appellant argued that the duty demand was premature as the Development Commissioner had not debonded the unit. The Tribunal held that duty on capital goods should only be confirmed after debonding of the EOU, which was the responsibility of the Development Commissioner. As the Development Commissioner had not debonded the unit in this case, the Tribunal found the duty demand premature and set it aside for further adjudication.

Order of Confiscation of Goods and Imposition of Penalties:
The Commissioner also ordered the confiscation of goods and imposed penalties on the appellant-company, Managing Director, and Directors for failing to meet the export obligation. The Tribunal noted that the Development Commissioner had not made a definitive finding regarding the export obligation fulfillment. As a result, the Tribunal found the order of confiscation and imposition of penalties premature and not sustainable. The matter was remanded for de novo adjudication after the Development Commissioner's decision on meeting the export obligation.

In conclusion, the Tribunal set aside the impugned order and remanded the matter to the Commissioner for further adjudication after ascertaining the Development Commissioner's decision on the export obligation fulfillment. The appeals were disposed of accordingly.