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TMI Blog2009 (5) TMI 512X X X X Extracts X X X X X X X X Extracts X X X X ..... t obligation under the scheme and obtained Export Obligation Discharge Certificates(EODC) from the Joint Director General of Foreign Trade (JDGFT) vide letter dated 1-2-2006. Based on the EODCs issued by the JDGFT, the appellant applied to the Customs for finalization of the assessments and cancellation of Bonds and Bank Guarantees executed by them at the time of provisional assessments. The provisional assessments were finalized on 6-4-2006 and the Bonds and Bank Guarantees were cancelled. 3.1 However, after a period of one year from the finalization of the assessments, Revenue proceeded against the appellant with the issue of Show Cause Notice dated 12-4-2007. The allegations are that the impugned vehicles had been registered as private vehicles. They had not kept any record showing the usage of the imported vehicle, which is not in conformity with para 5.15 of the Handbook of Procedures and the export earnings have not been earned on account of the actual use of the impugned vehicles. Consequently, the Adjudicating Authority demanded duty to the tune of Rs. 49,44,871/- under proviso to sub-section (1) of Section 28 read with Section 125(2). Interest under Section 28AB was deman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision of the Apex Court in the case of Mangalore Chemicals and Fertilizers Ltd. v. Deputy Commissioner - 1991 (55) E.L.T. 437 (S.C.). The Apex Court in the above case has held that :- "11.... There are conditions and conditions. Some may be substantive, mandatory and based on consideration of policy and some other may merely belong to the area of procedure. It will be erroneous to attach equal importance to the non-observance of all conditions irrespective of the purpose they were intended to serve". (ii) The appellants have maintained proper accounts in the course of their business with regard to the earnings of foreign exchange and the said fact is not disputed by the Department. Since the impugned notification does not stipulate maintenance of separate records for fulfillment of the export obligation, the non-maintenance of such records cannot be a ground for denial of the benefit of the said exemption notification. In any case, the accounts produced by the appellants are duly audited and certified by the Statutory Auditors and, therefore, the contention of the learned Commissioner that the accounts maintained by the appellants ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellants on 6-4-2006. After the cancellation of the Bonds and Bank Guarantees and finalization of the assessments, the appellants were issued with a Show Cause Notice proposing to demand duty invoking larger period of limitation. It was urged that once the licencing authority has accepted the export obligation and issued EODCs, based on such EODCs and after such verification, the Customs authorities have finalized the assessments, they could not have issued a Show Cause Notice invoking longer period under Section 28(1) of the Customs Act, as none of the ingredients mentioned therein are present in the instant case. In any case, neither the Show Cause Notice nor the impugned order was able to establish a case for invoking the longer period. (vii) The finalization of the assessment can only be challenged by filing an appeal and not by issuing a Show Cause Notice in the light of the decision of the Hon'ble Apex Court in the case of Priya Blue Industries Ltd. v. CC(Preventive) - 2004 (172) E.L.T. 145 (S.C.). (viii) In view of the above, the penalty imposed under Section 114A cannot be sustainable in law. 6. The learned JCDR stated that the appellant had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e considered towards fulfillment of EQ. ii. Export earnings through alternate products and services, like room rent, income from sale of food, beverages etc. should not be considered towards discharge of EO 3. As regards 2(i) above, mandatory requirement of registration of cars imported under EPCG as Tourist/Commercial vehicles has been notified on 14-6-2006 and included as a part of the Foreign Trade Policy 2004-09. Prior to this date, there was no such stipulation in the Foreign Trade Policy. Therefore, foreign exchange earnings by use of these vehicles not registered as Commercial/Tourist vehicles cannot be denied the benefits of -considering the same towards fulfillment/discharge of EO, so long as no other misuse/transfer of such a vehicle/registration of such vehicle in the name other than the licence holder is reported. As regards the mandatory registration of these vehicles as Tourist/Commercial vehicles prior to this date, there appears to be violation of Motor Vehicles Act on account of use of private registered vehicles for commercial purposes. However, this aspect has to be looked into by the Regional Transport Authority concerned and DRI is at liberty to approach. RTA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted that in many cases, they may allow the use of the vehicle as complement to Tourists. In those cases, they may not be billing them separately. And it would be very difficult and there will be practical difficulties in showing the earnings which are done exclusively through the use of the car. We do not find any merit in the contention that the vehicle was registered in the name of the Director, for his personal use. The Director is an official of the hotel and when it is registered in the name of the Director, we do not find anything is wrong. In any case, the vehicle had been registered as a Contract Carriage even on 30-1-2006. The installation certificate had been delayed. On account of that, it is not fair to deny the benefit of the exemption notification. Even the DGFT circular directing vehicles to be used for tourist purpose has been issued on 7-5-2008. On going through the DGFT circular as well as the clarification given which we had already reproduced, it is seen that in these matters a broader view has to be adopted. Moreover, there is time for fulfillment of export obligation up to 2011. It is also very premature on the part of the Customs to have demanded duty from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of these vehicles. The letter goes on to instruct that all earnings, including earnings for providing hotel accommodation and sale of food and beverages apart from transportation of the tourist should be considered towards discharge of export obligation against the vehicles imported under the EPCG Scheme. What would qualify for export obligation is essentially basic to the scheme and therefore any interpretation of the policy in this regard is in my opinion fully within the exclusive jurisdiction of the competent authority under the policy. In view of the interpretation of the DGFT as above and considering that such interpretation of the Policy by the DGFT is binding as per provisions of Para 2.3 of the Policy, I hold that the overall foreign exchange earnings needs to be reckoned towards discharge of export obligation." 7.2 After giving such a finding, the Commissioner takes entirely a different decision. In this case, first of all, the fact that the goods have been imported and put to use by the appellant is not in dispute. The violations pointed out by the Revenue are only technical in nature. For example, one of the objections is that they had not produced the installation ..... X X X X Extracts X X X X X X X X Extracts X X X X
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