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TMI Blog2015 (6) TMI 185X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue is also in appeal against the impugned order. Accordingly, we dispose of all the three appeals by a common order. 2. On 29.09.2010, EPCG Licence No.0330027356 was issued to the Appellant Company, under Chapter 5 of the Foreign Trade Policy, for import of one "Rolls Royce Ghost" model car at concessional rate of duty with obligation of export of services, namely "Hotel & Tourism related services" to be completed in 8 years. The condition sheet dated 29.09.2010 attached to the EPCG Licence mandates that the vehicle was to be registered for "tourist purpose only". The export obligation was to be fulfilled as per para 5.8 of the Hand Book of Procedure (HBP). 3. The Bill of Entry No.804920 dated 06.11.2010 was thereafter filed for importing the "Rolls Royce Ghost" model car on payment of BCD @ 3% (concessional rate) availing benefit of exemption of duty under Notification No.103/2009-Cus dated 11.09.2009 against the said EPCG License dated 29.9.2010. A bond was submitted by the Appellant Company, which binds them inter alia to observe all conditions of Notification No.103/2009-Cus dated 11.09.2009. The proper Officer assessed the Bill of Entry under EPCG Scheme and the vehicle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me and thus according to him the Order-in-Original was just and proper. 6. On the other hand, the Learned Advocate appearing for the Appellants denied the allegations on the basis of the grounds raised in the Appeal and submitted that the impugned Order was erroneous and no condition of EPCG license or the Exemption Notification was violated by the Appellants. 7. We have carefully considered the submissions of both the sides and have perused the records and the relevant provisions and conditions of exemption. 8. The relevant conditions under the EPCG licence, provisions of the Foreign Trade Policy and the conditions of the Exemption Notification are as under- (A)Conditions of EPCG Licence (Para 18.2 and 18.3.2 of the impugned Order): "1. This Authorisation has been issued under Chapter 5 of Foreign Trade Policy 2009-2014 and carries an export obligation to export to GCA countries and realise the export proceeds in freely convertible currency and is subject to the conditions as laid down in Chapter 5 of Foreign Trade Policy and Procedures Vol.1 2009-2014. The authorisation holder shall supply goods to categories carried under para 8.2 (a), (b), (d), (f), (g) and (j) of the poli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nufacturer(s) and service providers..... Conditions for import of Capital Goods 5.4 Import of capital goods shall be subject to Actual User condition till export obligation is completed. Para 5.8 and 5.15 of the Handbook of Procedures: Conditions for fulfillment of Export Obligation 5.8 The Authorization holder under the EPCG scheme shall for fulfill the export obligation over the specified period in fulfillment of the following proportions: For concessional 3% duty EPCG Scheme Period from the date of issue of Authorization Minimum export obligation to be fulfilled Block of 1st to 6th year Block of 7th and 8th year 50% 50% Maintenance of Records 5.15 Every EPCG authorization holder shall maintain, for a period of 3 years from date of redemption, a true and proper account of exports/ supplies made and services rendered towards fulfillment of export obligation. 4. Relevant conditions of Exemption Notification 103/2009-Cus dated 11.9.2009 "2. The exemption under this notification shall be subject to the following conditions, namely:- (1) that the goods imported are covered by a valid authorization issued under the Export Promotion Capital Go ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , namely:- S. No. Period from the date of issue of Authorization Proportion of total export obligation (1) (2) (3) 1. Block of 1st to 6th year 50% 2. Block of 7th to 8th year 50% ....... Provided also that export obligation of a particular block may be set off against the excess exports made in the said preceding block(s); ....... (7) that the capital goods imported, assembled or manufactured are installed in the importer's factory or premises and a certificate from the jurisdictional Deputy Commissioner of Central Excise or Assistant Commissioner of Central Excise, as the case may be, is produced confirming installation and use of capital goods in the importer's factory or premises, within six months from the date of completion of imports or within such extended period as the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, may allow: Provided that in case of import of spares, the installation certificate shall be produced within three years from the date of import: Provided further that if the importer is not registered with central excise or if he is a service provider, as the case may be. he may produce t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an neither be presumed at this stage that the Appellants cannot or would not complete their export obligation under the EPCG license, nor can the vehicle be confiscated on this presumption. Department has not proved that the actual user condition has been violated by disposing of or transferring the vehicle by sale or lease or any other manner before completing the export obligation. 13. There is no condition stipulating to park the vehicle imported under EPCG scheme at a particular place, or to seek its registration only from any particular RTO office. Mere parking of the vehicle at a particular place cannot be considered as violation of actual user condition or proof of the usage of vehicle in a particular manner or of transfer of ownership. The said seized vehicle was provisionally released by the adjudicating authority to the Appellant Company against bank guarantee of Rs. 1,25,53,394/-, which was reduced by the Hon'ble High Court of Karnataka, vide Order dated 09.10.2013 to Rs. 75 lakhs, and was furnished on 14.10.2013. This provisional release granted to the Appellant Company before issuance of the show cause notice also indicates that the department is satisfied regardi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d diversion of goods contrary to the spirit of the Scheme, which could be investigated and made a basis for further action against the importer......" There is no dispute that thereafter on similar lings, the office of DGFT has already clarified vide File no. 01/94/180/518/AM07/PC-1/770 dated 27.12.2006. in another case of import of vehicle under EPCG scheme as follows- "4. As regards 2nd issue at 2(ii) above, in the working of hotel, tourism and travel service industry the vehicles are part of an overall package drawn by these service providers for the tourists. This package may include hotel accommodation, food, beverages and travel cost and charges for utilizing imported vehicles would not be billed separately to the tourist It is therefore not practically possible for these sectors to show export earnings separately from use of these vehicles. Therefore, the views expressed by the DRI on this score cannot be accepted and all benefits including all earnings for providing hotel accommodation, sale of food and beverages apart from transportation of the tourist, should be considered towards discharge of export obligation against vehicles imported under EPCG scheme. This is howeve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in use by them of the vehicle imported under EPCG scheme in connection with "Hotel and Tourism related services", as long as the vehicle is also used in providing these services in discharging the export obligation. 15. In the instant case, the "Export Item Name" for the Appellant Company as seen from the Condition Sheet attached to their EPCG license is "Hotel and Tourism related services". The vehicle is accordingly registered for "Tourist purpose" in the name of the Appellant Company owning a "Hotel" in State of Karnataka at Bangalore. In view of the above binding precedents in Interglobe Enterprises Ltd (supra), Air Travel Bureau Ltd (supra) and the clarification from the office of DGFT, it is not mandatory that the Hotel of the Appellant Company should have charged separately for the use of the vehicle to collect money in foreign exchange specifically under the head of transportation charges with separate accounting of the same. 16. The essential requirement is that the vehicle shall be an added attraction for the foreign tourist and/or shall be put to use for the business activity for which the same was imported. Whereas it is alleged that the guests for whom the vehicle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the said vehicle was being parked at the residence of CMD of the Hotel for security reasons and that the said vehicle was given to guests on complimentary basis. He also stated that the expenses towards repairs and maintenance of the vehicle are met by the Hotel. Shri S.M. Doss, the General Manager in his statement dated 23.05.2013 inter alia stated that the Rolls Royce is used for ferrying only VVIP guests, and in this regard CMD informs the front office or the driver directly. The Driver whose statement was recorded has been driving four different vehicles and was not kept to exclusively drive the subject vehicle. He admits having attended to in-house guests, and that since there is no safe and sufficient parking at Hotel, the Rolls Royce car is parked at the residence of the CMD and sometimes at the premises of Hotel. This driver cannot be presumed to be competent to identify the nationality of the guests. Guests of Indian origin from Asian countries do not look different from resident Indians. Further, the non-resident Indians are also bound to spend in foreign exchange during the short periods of stay in India. Hence no conclusive inference can be derived from the version ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ons. 23. There is no dispute on the fact that the vehicle was registered as "tourist cab" that is for Tourist purpose, and a Tourist Permit was obtained from RTO. Later on it was migrated to RTO Bangalore from RTO Chitradurga (both within the State of Karnataka). However, there is no dispute that it remains registered in the name of the Appellant Company and for "tourist purpose". It is also undisputed that the vehicle is neither registered in the name of the CMD of the Company, nor is there any allegation of such attempt. 24. We find that none of the statements contain any positive admission that the Appellant Company actually intended to import the car only for personal use of Shri Prakash Shetty. These statements and the records do not dispute the fact that after importation, the vehicle is actually registered in the name of "Goldfinch Hotels Pvt Ltd" and for "Tourist purpose" only. None of these statements even remotely allege any sale or transfer of the vehicle to any other person or entity, and moreover the registration with RTO stands in the name of the Appellant Company. It is also not in dispute that the balance sheet of the appellant company filed with the Registrar of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d against the Appellant under the provisions of FTDR Act, 1992. On the other hand another wing of the Central Government through Ministry of Finance, Department of Revenue, seeks to deny the benefit of the exemption by adopting a different interpretation of the provisions of the Policy or on the basis of the Notifications issued under the provisions of the Customs Act, 1962. It is seen that the Ministry of Commerce which was responsible for the issuance of the Foreign Trade Policy was in the best position to construe its own provisions, Public Notices and the Policy Circulars. It is to be presumed that while formulating the Foreign Trade Policy even the Departments of Revenue must have been duly consulted. Therefore, with regard to the language used in Para 2.4 of the Foreign Trade Policy, it is the view expressed by the Ministry of Commerce, which must be taken to be that voice. Para 2.4 of the FTP reads thus- "Procedure 2.4 DGFT may; specify procedure to be followed for an exporter or importer or by any licensing or any other competent authority for purpose of implementing provisions of FT (D&R) Act, the Rules and the Orders made there under and FTP. Such procedures shall be pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (d) and P6 licence as well. 4. In the light of Exts. PI7 and P18 clarifications issued by the Director General of Foreign Trade, this writ petition is disposed of clarifying that the petitioner will be entitled to duty credit for the goods imported under Exts. P9 to P15 and the Bank guarantees furnished by the petitioner will be returned. It is also declared that the petitioner will be entitled to the benefit of the balance amount of duty credit certified under Exts. P5 to P5(d) and Ext. P6 licence as well. 5. True, the counsel to. the department raised an objection that in the absence of a notification issued by the Customs as a consequence of Exts. P17 and P18, the benefit cannot be claimed at this stage. However, having regard to the fact that the Government of India have issued Exts. P17 and P18, / do not think it will be reasonable to require the petitioner to wait until any notification is issued by the Customs Department to get the benefit. Therefore, there is no substance in this objection." 26. The benefits conferred under the FTP therefore cannot be denied to the Appellant. We find that neither the Foreign Trade Policy nor the Exemption Notification lay down the nature ..... X X X X Extracts X X X X X X X X Extracts X X X X
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