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2024 (12) TMI 1038 - AT - CustomsDenial of duty exemption availed by the appellant against EPCG authorization for the import of goods under N/N. 97/2004--Cus. dated 17.09.2004 - HELD THAT - From the copy of the T.R 6 challan placed on record, it is found that the appellant has remitted the Customs duty along with interest on 27.03.2024. The Authority being satisfied with the remittance of duty and interest as per the Amnesty Scheme, has issued closure letter. Hence, there is no scope to confirm the penalty which is imposed on an alleged violation. Though Ld. Advocate has disputed leviability of penalty under Section 112 (a) ibid since the violation here is of EPCG scheme, for the reasons which were beyond the reach of the appellant but, however, it is found that the whole Amnesty Scheme does not specify anything about the penalty and hence, it is possible that any violation insofar as the non-fulfilment of export obligation is concerned, is not viewed as irregularity or a mala fide intention. It is deemed appropriate to set aside the impugned order and the penalty - appeal allowed.
Issues:
Denial of duty exemption under EPCG authorization, demand of Customs duty, interest, and confiscation of capital goods, imposition of penalty under Section 112 (a) of the Customs Act, 1962. Analysis: The appeal was filed against the Order-in-Original denying duty exemption under EPCG authorization and demanding Customs duty of Rs.1,13,36,651 along with interest. The Adjudicating Authority also ordered the confiscation of capital goods and imposed a penalty under Section 112 (a) of the Customs Act, 1962. The appellant availed the benefit of the Amnesty Scheme for one-time settlement of default in export obligation by paying the entire Customs duty demanded, leading to the issuance of a Final Duty Paid Regularization letter by the Dy. DGFT. The appellant sought the deletion of the penalty under Section 112 (a) based on this regularization. The Additional Commissioner acknowledged the appellant's compliance with the Amnesty Scheme. The Tribunal considered the relevant provisions of the Amnesty Scheme, noting that the closure letter was issued upon the satisfaction of duty and interest payment. The Tribunal found no basis to confirm the penalty, as the Amnesty Scheme did not address penalties for non-fulfillment of export obligations, suggesting a lack of mala fide intention. Consequently, the Tribunal set aside the impugned order, penalty, and allowed the appeal. This case involved the interpretation and application of the Amnesty Scheme for one-time settlement of default in export obligation by Advance and EPCG authorization holders. The Tribunal analyzed the coverage and provisions of the Scheme, emphasizing that authorizations issued under specific schemes till certain dates were eligible for regularization under the Scheme. The Scheme allowed for the regularization of cases with default in meeting export obligations by paying exempted Customs duties and interest. The Tribunal noted that the closure letter was issued after the appellant remitted the duty and interest as per the Scheme, indicating compliance and leading to the setting aside of the penalty imposed under Section 112 (a) of the Customs Act, 1962. In conclusion, the Tribunal's decision was based on the appellant's compliance with the Amnesty Scheme, leading to the issuance of a closure letter by the Authority. The Tribunal found no grounds to uphold the penalty imposed under Section 112 (a) of the Customs Act, 1962, as the Scheme did not address penalties for non-fulfillment of export obligations. By setting aside the penalty and allowing the appeal, the Tribunal recognized the appellant's regularization efforts under the Amnesty Scheme, highlighting the importance of adherence to such schemes for resolving default issues related to export obligations.
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