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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 ..... DGFT 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. - C/721/2008 - 977/2009 - Dated:- 4-5-2009 - S/Shri T.K. Jayaraman, Member (T) and M.V. Ravindran, Member (J) Shri B. Venugopal, Advocate, for the Appellant. Ms. Sudha Koka, SDR, for the Respondent. [Order per : T.K. Jayaraman, Member (T)]. - This appeal has been filed against the Order-in-Original No. 32/2007, dated 18/22-10-2007 passed by the Commissioner of Customs, Custom House, Cochin. 2. We heard both sides. 3. The appellant, M/s. Kumarakam Lake Resort, are service provider in the Hotel Industry. They imported 2 BMW Brand Motor Vehicles under the EPCG Scheme. The Vehicles were cleared provisionally on payment of concessional rate of duty of 5% on execution of Bonds with Bank Guarantees in terms of Notification No. 44/2002-Cus., dated 19-4-2002 and subject to the conditions stipulated therein. The vehicles were registered with the Kerala Transport Authority in the name of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gibility of benefit of concessional rate of duty. It was also stated that in terms of Condition No. 4, the importer is required to obtain a Certificate from the Jurisdictional Assistant Commissioner or Deputy Commissioner of Central Excise, confirming the installation and use of capital goods in the importer's premises, as a proof of usage of the goods by the importer. In any case, it was argued that the said condition does not determine the eligibility for exemption so long as the usage of the imported goods for the purposes of earning foreign exchange is established. In the present case, the appellants admit that they could not file a certificate confirming the installation and use of the cars in their resort, as they were under the impression that the registration of the vehicles in their name would itself be sufficient. However, they filed a Chartered Engineer's certificate with regard to the imported cars being used in their resort with the JDGFT, at the time of seeking redemption of the EPCG licence. The noncompliance of the said condition is not substantive and cannot be a reason for denying the benefit of the exemption notification. Reliance was placed on the decision of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DGFT for closure of the EPCG licence and issuance of EODC. Based on the applications made by the appellants, the JDGFT issued EODCs vide their letter dated 1-2-2006 and the copies of the said EODCs were forwarded to the Office of the Commissioner of Customs, Custom House, Cochin. Reliance was placed on the following decisions wherein it was held that the demand of duty under the impugned order after the discharge of export obligation is not sustainable. (a) Rajesh Exports Ltd. v. CC, Bangalore - 2006 (199) E.L.T. 833 (Tri.-Bang.) (b) Ashok Enterprises v. CC, Chennai - 2005 (186) E.L.T. 497(Tri.-Chennai) (c) Navjyothi International v. CC, Chennai - 2004 (177) E.L.T. 875 (Tri.-Chennai) (vi) In the present case, based on the EODCs issued by the JDGFT, the Jurisdictional Assistant Commissioner had finalised the assessments canceling the Bonds and Bank Guarantees executed by the appellants 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ustry Department of Commerce Directorate General of Foreign Trade Udyog Bhawan, New Delhi Dated 27-12-2006 To The Joint Director General of Foreign Trade Bangalore [Attn. Shri M. Balagangadharan, Joint DGFT] Subject : Import of Cars under EPCG Scheme - reg. Sir, Please refer to your Letter No. 7/21/EPCG.MISC.Statement/06, dated 3-11-2006 with regard to the DRI communication under their reference No. S/IV/43/2005/661, dated 4-7-2006 received in that office. 2. The matter has been examined in detail. In their communication DRI has raised two issues : i. The cars imported under the erstwhile policy registered in individual name should first be got registered as tourist and commercial vehicles and foreign exchange earnings after such conversion alone should be 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... letter it is seen that the DRI requested the DGFT to issue clarification saying that export earnings through alternate products and services like room rent, income from sale of food beverage should not be considered towards the discharge of Export obligation. This point has not been accepted by the DGFT as it would be very difficult to show export earnings separately because of the use of the vehicle. In the overall package of the hotel, the use of the vehicle also would be included. In other words, the package includes very many things including the use of the vehicle. From the clarification, it is clear that it is not very necessary that the appellants have to show the amount of foreign exchange earned because of the exclusive use of the car, due to practical difficulties. The appellants also have stated 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , dated 3-8-98, all prescribe that the export obligation shall be fulfilled by the use of the capital goods imported. I further find that the Letter No. 01/94/180/516/AM07/PC-I, dated 27-12-06 from the Directorate General of Foreign Trade clarifies and dwells at length on the issue of what shall qualify towards fulfillment of Export Obligation. The letter states that in the working of Hotel, Tourism and Travel Service Industry the vehicles are part of an overall package drawn by the service providers for the tourists, that this package may include hotel accommodation, food, beverages and travel cost, that the charges for utilizing the imported vehicles would not be billed separately to the tourist and that therefore it is not practically possible for these sectors to show export earnings separately from use 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 schem ..... X X X X Extracts X X X X X X X X Extracts X X X X
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