2017 (12) TMI 1457 - HC - Customs

Benefit of Advance license - discharge of export obligation - non-production of documents to establish the discharge of export obligation - Held that - the very basis for the differential demand confirmed against the petitioner in Exts. P2 and P5 orders has been removed - in view of the Export Obligation Discharge Certificate issued to the petitioner by the 3rd respondent, the petitioner shall be deemed to have discharged his export obligation in terms of the advance licence granted to him - petition allowed.

Summary

Issues:
1. Delay in submitting documents for Export Obligation Discharge Certificate
2. Denial of concessional rate of Customs duty and demand of duty
3. Appeal against the order of the appellate authority under the Customs Act
4. Justification of orders by authorities under the Customs Act
5. Redemption of export obligation by issuance of Export Obligation Discharge Certificate
6. Quashing of orders confirming the demand of differential duty

Analysis:

1. The petitioner imported 'Boswellia gum' under an advance license and was required to fulfill an export obligation by a specified date to avail the concessional rate of Customs duty. Due to a delay in submitting documents for the Export Obligation Discharge Certificate, the 2nd respondent denied the concessional rate and demanded duty amounting to ?6,87,366 along with interest. The petitioner contended that the 2nd respondent acted hastily despite ongoing efforts to obtain the necessary certificate.

2. The authorities justified their actions by emphasizing the strict interpretation of the exemption notification under the Customs Act. They argued that compliance with procedural conditions was necessary to qualify for the concessional rate of duty. The 3rd respondent confirmed that after the petitioner submitted the required documents, the Export Obligation Discharge Certificate was issued, thereby fulfilling the export obligation.

3. The petitioner appealed the orders of the original and appellate authorities under the Customs Act, challenging the differential duty demand. The appellate authority dismissed the appeal as time-barred, leading the petitioner to file a writ petition against the orders (Exts. P2 and P5) confirming the duty demand.

4. After considering the submissions and examining the orders (Exts. P2 and P5), the judge observed that the basis for the differential duty demand was the petitioner's failure to produce documents proving export obligation discharge. However, with the issuance of the Export Obligation Discharge Certificate by the 3rd respondent, the basis for the demand was deemed removed. Consequently, the judge quashed the orders (Exts. P2 and P5) and declared that the petitioner had fulfilled the export obligation as per the advance license.

5. The judgment concluded by closing the writ petition, stating that the petitioner shall be considered to have discharged the export obligation in accordance with the advance license, following the issuance of the Export Obligation Discharge Certificate by the 3rd respondent.