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2009 (5) TMI 512 - AT - CustomsEXIM-EPCG Scheme- Notification No. 44/2002-Cus., dated 19-4-2002- The two cars have been imported under the EPCG Scheme. The fact that the goods have been imported and put to use by the appellant is not in dispute. The violation pointed out by the revenue are only technical in nature for example, one of the objections is that they had not produced the installation certificate. Normally, the EPCG Scheme generally deals with the machineries and in respect of machineries imported, normally they are to be installed. But the case of the car is peculiar. The car is a transport vehicle and in respect of car, to obtain an installation certificate may not be appropriate. Moreover, the registration as a passenger vehicle and not as tourist vehicle has also been explained by the appellant as the amendment came only later. These are all only been explained by the appellant as the amendment came only later. These are all only technical violation for which the exemption cannot be denied. Moreover, based on the information submitted by the appellant, the JDGFT authorities have accepted their contention and issued the Export Obligation Discharge Certificate. In these circumstances, there is no warrant for taking action against the appellant. Further, the ingredients for invoking the longer period are also not available in this case.
Issues Involved:
1. Non-compliance with procedural requirements under Notification No. 44/2002-Cus. 2. Maintenance of proper accounts for services rendered. 3. Registration of imported vehicles as private vehicles. 4. Demand for duty after finalization of assessments. 5. Invocation of extended period of limitation under Section 28(1) of the Customs Act. 6. Imposition of penalty under Section 114A. Detailed Analysis: 1. Non-compliance with Procedural Requirements: The appellant argued that the procedural requirement under Condition 4 of Notification No. 44/2002-Cus., dated 19-4-2002, for obtaining a Certificate of Installation from the Jurisdictional Assistant Commissioner or Deputy Commissioner of Central Excise was not substantive. They relied on the Supreme Court decision in Mangalore Chemicals and Fertilizers Ltd. v. Deputy Commissioner, which distinguished between substantive and procedural conditions. The Tribunal agreed that the non-compliance with the procedural requirement did not justify denying the benefit of the exemption notification, especially since the usage of the imported goods for earning foreign exchange was established. 2. Maintenance of Proper Accounts: The appellant maintained that proper accounts were kept regarding foreign exchange earnings, which were duly audited and certified by Statutory Auditors. The Tribunal found that the impugned notification did not stipulate the maintenance of separate records for the fulfillment of export obligations. Therefore, the non-maintenance of such records could not be a ground for denying the exemption benefit. 3. Registration of Imported Vehicles: The vehicles were registered as private vehicles, but the appellant contended that the requirement for registration as tourist/commercial vehicles was introduced only on 14-6-2006, after the importation of the vehicles in 2002. The Tribunal noted that the vehicles were used for tourist purposes, and the registration as passenger cars prior to the new stipulation could not be a reason for denying the exemption benefit. 4. Demand for Duty After Finalization of Assessments: The appellant had fulfilled the export obligation and obtained Export Obligation Discharge Certificates (EODC) from the JDGFT. The Tribunal referenced similar cases where it was held that the demand for duty after the discharge of export obligation was not sustainable. The Tribunal found that once the JDGFT issued EODCs and the Customs authorities finalized the assessments, issuing a Show Cause Notice was not justified. 5. Invocation of Extended Period of Limitation: The Tribunal held that the ingredients for invoking the extended period under Section 28(1) of the Customs Act were not present. The issuance of a Show Cause Notice after the finalization of assessments and cancellation of Bonds and Bank Guarantees was deemed improper. 6. Imposition of Penalty: Given the above findings, the Tribunal concluded that the imposition of a penalty under Section 114A was not sustainable. The Tribunal emphasized that the violations pointed out by the Revenue were technical and did not warrant such penalties. Conclusion: The Tribunal set aside the impugned order, allowing the appeal with consequential relief. The Tribunal emphasized a broader interpretation of the EPCG scheme and procedural compliance, noting that technical violations should not lead to the denial of exemption benefits, especially when the substantive conditions were met.
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