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2023 (12) TMI 8 - AT - CustomsConfiscation of goods - capital goods imported as per EPCG licenses - levy of redemption fine, penalty and interest - non-fulfilment of Export obligation - scope of extension granted by the committee - denial of exemption availed under notification 102/2009-Cus. dt. 11.09.2009 - HELD THAT - The SCN has been issued in 2016 alleging the non-fulfilment of 50% EO, and diversion of capital goods. The appellants were informing the adjudicating authority about the steps taken for getting extensions of time. Further on 25.03.2019, they submitted letter to the adjudicating authority informing that they are in the process of complying with the conditions of the EPCG Committee s decision. This being so, it was incumbent upon the adjudicating authority to give the appellants reasonable time to comply with the conditions and should not have passed the order in a hurried manner even without grant of personal hearing. The EPCG Committee had not prescribed any time limit for compliance of the conditions. The assessee is then supposed to comply within a reasonable time. The assessee has been diligent to comply within a time period of about three months - The DGFT and Customs have to act hand in hand to give effect to the object of issuing such beneficial schemes. It should not be a tug of war so as to drive the assessee from pillar to post and getting their resources tied up in litigations. We therefore find that the changed circumstances as to the extension of period and compliance has to be taken into consideration. The EPCG Committee has not stated any time period to comply with the conditions. There is no mention in the order of EPCG Committee that the extension of two years is to be applied retrospectively. When there is no specific mention of such event in the decision of EPCG Committee, the extension has to be construed as intended in the decision itself, which is nothing but extension of time by two years to fulfil their export obligation. The order passed by adjudicating authority without considering the relaxations, compliance and fulfilment of export obligations so as to confirm the duty demand, confiscation and imposition of penalties on M/s.Ashok Leyland, the main appellant, requires reconsideration - the matter requires to be remanded to the adjudicating authority who is directed to consider the decisions passed by the Committees, the compliances made by the appellants and the fulfilment of export obligations and pass fresh order preferably within 3 months from the date of receipt of this order. Appeal allowed by way of remand.
Issues Involved:
1. Non-fulfillment of Export Obligation (EO). 2. Diversion of Capital Goods. 3. Non-availability of Capital Goods. 4. Demand of Duty and Interest. 5. Confiscation and Penalties. Summary: Non-fulfillment of Export Obligation (EO): The primary issue was that M/s. Ashok Leyland Nissan Vehicles Ltd. (ALNVL) failed to achieve the minimum 50% export obligation in respect of 23 EPCG authorizations within the block period of 1st to 4th year. The DGCEI-CZU registered a case of violation of the EPCG Scheme, leading to a Show Cause Notice (SCN) dated 15.09.2016 proposing to demand differential duty along with interest and penalties. The EPCG Committee later granted an extension of the export obligation period for 14 licenses, and the Policy Relaxation Committee condoned procedural irregularities for 12 licenses, allowing the appellant to fulfill their export obligations. Diversion of Capital Goods: The investigation revealed that ALNVL had indulged in the diversion of capital goods to unauthorized premises under nine EPCG authorizations. The Policy Relaxation Committee condoned these procedural irregularities, regularizing the installation of capital goods in different locations other than those endorsed in the authorizations. Non-availability of Capital Goods: Some of the capital goods imported under five EPCG authorizations and installed at the premises of M/s RNAIPL were found to be destroyed/consumed by wear and tear and were not available for further production. The Policy Relaxation Committee condoned these procedural lapses as well. Demand of Duty and Interest: The adjudicating authority passed an order demanding customs duty and interest for non-fulfillment of export obligations and procedural lapses. The appellants argued that they had complied with the conditions imposed by the EPCG Committee and Policy Relaxation Committee by paying the composition fees and fulfilling the export obligations within the extended period. Confiscation and Penalties: The adjudicating authority ordered the confiscation of seized capital goods and imposed penalties on ALNVL and supporting manufacturers. The Tribunal noted that the competent authority had granted extensions and condoned procedural lapses, and thus, the penalties imposed on supporting manufacturers were set aside. The matter was remanded to the adjudicating authority to consider the decisions of the EPCG and Policy Relaxation Committees and the compliance made by the appellants. Conclusion: The Tribunal set aside the impugned order and remanded the matter to the adjudicating authority for reconsideration, directing them to consider the decisions passed by the Committees, the compliances made by the appellants, and the fulfillment of export obligations, and to pass a fresh order within three months. The appeals filed by the supporting manufacturers were allowed.
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