2018 (11) TMI 763 - AT - Customs

Extension of time for installation of machinery imported under EPCG Scheme - due to the financial crunch, the appellant could not complete the installation and commissioning of the goods imported for Acid Recovery Plant and Copper Recovery Plant - Held that - The appellants are a Government of Kerala undertaking and is primarily depending upon the funds provided by the Government. The appellants are engaged in the installation of the neutralization plant which found part of the pollution control equipment to be installed on the instructions of the Hon ble Supreme Court and the appellant s funds were diverted towards setting up of neutrlisation plant. Since in the present appeal, the only prayer is extension of time up to 31/12/2018 for installation of machinery imported under EPCG scheme, we think it appropriate to grant the extension up to 31/12/2018 and direct the appellant to complete the installation within this period as the appellants were having genuine fund difficulty on account of which they could not complete the installation. Appeal allowed.

Summary

Issues involved:
1. Mandatory predeposit under Section 35F of the Central Excise Act, 1944 for an appeal against a rejection letter.
2. Extension of time for installation of machinery imported under EPCG Scheme.

Analysis:
1. The judgment addressed the issue of mandatory predeposit under Section 35F of the Central Excise Act, 1944 for an appeal against a rejection letter. The appellant had filed an appeal against a rejection letter issued by the Commissioner of Customs, Cochin, regarding the extension of time for installation of machinery imported under the EPCG Scheme. The appellant argued that there was no demand of duty, interest, or penalty involved in the appeal, and hence, mandatory predeposit should not be required. The Tribunal agreed with the appellant, stating that since there was no demand of duty, interest, or penalty in the case, the mandatory predeposit under Section 35F was not necessary, and the appeal was taken on record.

2. The judgment also delved into the issue of extension of time for installation of machinery imported under the EPCG Scheme. The appellants, a Government of Kerala undertaking, were installing Pollution Control Equipments and had obtained EPCG licenses to import capital goods for the projects. Due to financial constraints, they could not complete the installation within the initially granted time frame. Despite an extension granted by the Tribunal earlier, the installation remained incomplete, leading to a rejection of further extension by the Additional Commissioner of Customs. The appellant contended that the rejection lacked detailed grounds and violated principles of natural justice. After considering submissions from both sides, the Tribunal noted the genuine fund difficulty faced by the appellants and granted an extension of time until 31/12/2018 for the installation, directing them to complete it within the specified period. The judgment highlighted the appellant's reliance on government funds and the diversion of funds towards setting up a neutralization plant as contributing factors to the delay in installation.

In conclusion, the judgment resolved the issues of mandatory predeposit and extension of time for installation of imported machinery under the EPCG Scheme in favor of the appellant, emphasizing the genuine difficulties faced and granting the requested extension based on the circumstances presented.