2023 (9) TMI 729 - AT - Customs

EPCG Scheme - respondent was obligated to export the marbles mined using the said imported capital goods to the tune of eight times the duty foregone - seeking recovery of the duty foregone, once the export obligation period expired with interest and penalty - HELD THAT - It is not in dispute that the respondents could not undertake any mining activity because of the aforesaid restrictions imposed by the Hon ble Apex Court issued on 21.09.2005. To attach motives on part of the appellant under such circumstances is certainly not called for. It cannot be anybody s case that the respondents continued to import the capital goods with intentions of defrauding the revenue and depriving the department of its rightful claim. In any case the department has not been able to adduce any evidence in support of this proposition of theirs of mis-representation and deliberate suppression of facts. The fact that the respondents could not discharge their export obligation and hence failed to meet the export commitments leading to nonissue of the EODC is understandably beyond the control of the respondent. The compelling circumstances beyond their control pointed out by the respondents, have been admitted by the authorities. Therefore, no blame or aspersions can be cast on the respondents that they had malicious intent to defraud the revenue. This argument of the revenue is rejected summarily. There are no infirmity in the orders of the learned Commissioner (Appeals) - appeal filed by Revenue dismissed.

Summary

Issues Involved:
The appeal was filed by the revenue assailing the order passed by the learned Commissioner (Appeals) setting aside the penalty and interest imposed on the respondents.

Issue 1: Imposition of Penalty and Demand of Interest
The respondent obtained an EPCG Authorization for importing duty-free capital goods for mining marbles. Due to a stay on mining activities by the Hon'ble Apex Court and subsequent orders from the jurisdictional Collector, the mining could not commence. The revenue contended that the respondents continued importing goods despite the restrictions, alleging deliberate intent to defraud revenue. However, the Tribunal noted that the circumstances beyond the respondents' control prevented them from fulfilling the export obligation. The respondent approached the department to pay the duty foregone in installments and eventually paid the full amount. The Tribunal cited precedents where penalties and interest were waived due to similar uncontrollable circumstances. The revenue failed to prove any malicious intent on the part of the respondent, leading the Tribunal to dismiss the appeal and uphold the order setting aside the penalty and interest.

Conclusion:
The Tribunal found no infirmity in the order of the learned Commissioner (Appeals) and dismissed the appeal filed by the revenue.