2022 (4) TMI 1305 - HC - Customs

Export Promotion Capital Goods (EPCG) Scheme - fulfilment of Export Obligation or not - import of machinery with nil rate of BCD - HELD THAT - There can be no dispute about the fact that, the Appellant had discharged their Export Obligation, as would be evident from the Redemption Certificate issued on 27.10.2021. The production of Export Obligation Discharge Certificate (EODC) in terms of EPCG scheme is necessary for the importers to claim benefit under the said Scheme and delay in producing the Export Obligation Discharge Certificate (EODC) cannot result in denial of the benefit, more so, when the assessee/importer has admittedly discharged the Export Obligation and has also furnished the requisite documents before the appropriate authority for issuance of Export Obligation Discharge Certificate (EODC). A condition which is dependent on action by public authorities over which an assessee/importer has no control and, delay on the part of a public authority cannot result in denial of the benefit extended in larger public interest. Thus, the delay in obtaining Export Obligation Discharge Certificate (EODC) cannot result in denial of benefit under the EPCG Scheme, which itself has been formulated to promote export and earn foreign exchange. In the present case, the Appellant has discharged their Export Obligation and the same is also evident from the Redemption Letter dated 27.10.2021 and that, the delay in obtaining the same from ADGFT ought not result in denial of the benefit under EPCG Scheme. The Appellant/Writ Petitioner is permitted to produce the documents in support of their claim to demonstrate that, their export obligation has been discharged, within a period of eight weeks from the date of receipt of a copy of this judgment - Appeal allowed.

Summary

Issues:
Challenge to order under Export Promotion Capital Goods (EPCG) Scheme for non-fulfillment of export obligation and delay in obtaining Export Obligation Discharge Certificate (EODC).

Analysis:
1. The Appellant challenged the order passed by the Single Judge regarding the EPCG Scheme. The Appellant imported machinery under the scheme with a duty foregone of ? 86,37,700. The condition was to fulfill the export obligation by a specified date.

2. The Appellant claimed to have fulfilled the export obligation and submitted relevant documents to the authorities. However, there was a delay in obtaining the Export Obligation Discharge Certificate (EODC) despite reminders sent to the concerned authority.

3. A Show Cause Notice was issued proposing confiscation of goods and demanding duty for non-fulfillment of export obligation. The Appellant's submissions and reminders were considered, but the proposal was confirmed due to deficiency letters issued by the authority.

4. Subsequently, the Export Obligation Discharge Certificate (EODC) was issued, confirming the Appellant's compliance with the EPCG Scheme. The delay in obtaining the EODC was due to the authority's actions, not within the Appellant's control.

5. The Court emphasized that the Appellant had fulfilled the export obligation as evidenced by the Redemption Certificate. Referring to a Supreme Court judgment, the Court held that delay caused by public authorities should not result in denial of benefits under the scheme, especially when the obligation has been met.

6. The Court cited previous judgments where delays by public authorities did not lead to denial of benefits. Consequently, the Court set aside the Respondent's order and allowed the Appellant to produce documents supporting the export obligation fulfillment within a specified timeframe.

7. The Writ Appeal was allowed, and no costs were imposed. The connected application was closed, concluding the judgment.