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TMI Blog2016 (12) TMI 138X X X X Extracts X X X X X X X X Extracts X X X X ..... a number of hotels and operating a flight catering service, had imported the two luxury vehicles valued at vide bills of entr Rs. 112,16,536/ and Rs. 111,36,009/- vide bills no. 994821/19.11.2007 and 996166/19.11.2007 against authorization no. 033017208/23.8.2007 and 033017292/30.8.2007 at a concessional rate of duty of 5%. The Export Promotion Capital Goods (EPCG) scheme in the Foreign Trade Policy issued by the Director General of Foreign Trade in exercise of powers under the Foreign Trade (Development& Regulation) Act, 1992 permits import of permitted capital goods at a concessional rate with the condition that stipulated value of goods shall be exported or foreign exchange earned by rendering of prescribed services within eight years of issue of authorization. The concessional rate of import duty is extended by notification no. 97/2004-Cus dated 27th September 2004 that stipulate the conditions to be fulfilled to enable the import and after clearance. 3. The vehicles were seized on 20th September 2012 but released provisionally under section 110 of Customs Act, 1962. In the impugned order, the adjudicating authority has proceeded with action under Customs Act, 1962 for failure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tourism related services' whereas the authorization required appellant-company to provide 'car rentals/transport service for foreign tourist' which denied them the entitlement to claim fulfillment of export obligation by inclusion of revenues from hotel and flight catering operations. It was submitted that the licencing authority also had directed the appellant to clarify on this. He also contends that the ruling of the Tribunal in Surya Samudra Holiday Resorts Pvt Ltd v. Commissioner of Customs [2010 (256) ELT 433 (Tri-Mumbai] and of the Hon'ble High Court of Kerala in Commissioner of Customs v. Kumarakom Lake Resort [2011 (268) ELT 153 (Ker)] are more pertinent to the appellant's situation. 6. In re Surya Samudra Holiday Resorts Pvt Ltd, the Tribunal was called upon to settle a dispute relating to a luxuny car imported under the Export Promotion Capital Goods (EPCG) scheme by a hotel but was transferred from Thiruvananthapuram in Kerala to Benguluru in Karnataka; it was taken up for investigation after being issued with Export Obligation Discharge Certificate (EODC) by the licencing authority. The primary issues addressed were the nexus required between the i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng that principle, circumstances peculiar to each case will determine that appropriateness of the stage at which such intervention may be warranted. 7. Nowhere in the proceedings has it been adduced that the compulsions of statutory deadlines led to the issue of show cause notice. We do not consider that such a compulsion would ever arise in denying the availment of benefit of notifications issued under the Customs Act, 1962 for implementation of schemes in the Foreign Trade Policy. Such exemptions or concessions are conditional upon furnishing of a bond undertaking to pay the duty foregone, or part thereof, and interest in the event of non-compliance. A finding of noncompliance without resort to section 28 of Customs Act, 1962 would suffice to invoke the relevant provisions for recovery of dues payable to government. We notice that the appellant having made available copies of the correspondence with the licensing authority for issue of Export Obligation Discharge Certificate, the adjudicating authority was privy to the clarifications sought by licencing authority who was yet to take a decision in the matter. 8. In addition to the circumstances discussed supra, we consider it ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a condition that is impossible to perform. A waiver of the condition of installation in the conventional sense is implicit in issue of authorization for import of motor vehicles and in its registration by Customs authorities. Neither can it be expected to put to use after installation without moving from the premises of the importer. To impart a rigorous interpretation to conditions enumerated in an instrument framed primarily for regulating import of machinery or fixed assets and solely because it is an exemption notification which is, generally, required to be enforced strictly cannot be construed to pass the test of reasonableness. Nor can it be construed that reasonableness is displayed in equating 'parking' with installation. Policy circular no. 26/2009-14 dated 17th March 2010 thus admits to the scheme being extended to imports that cannot be installed. Failure to tailor an element of the notification to adjust to altered circumstances cannot be held to the detriment of a holder of valid licence issued by a competent statutory authority. As held by the Tribunal in re -Ifs Goldfinch Ltd and re M/s Hotel Excelsior Ltd. the ingredients of alienation of or failure to reg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fulfill the export obligation; and we notice that seizure was effected and importers directed to justify the imports well before that deadline. For the reason of not having awaited the completion of the deadline prescribed in the exemption notification for compliance with first report of prescribed proportion of achievement of obligation and of deciding on the extent of achievement of export obligation without proper authority, we find that that the proceedings are not legally sustainable. 13. We notice that one aspect of fulfillment of export obligation has not been considered in the judgments and decisions cited on behalf of Revenue. The various judgments that have been relied upon or followed have dealt with export promotion schemes in the Foreign Trade Policy (or the predecessor Export Import Policy), corresponding notifications under Customs Act, 1962 and the jurisdiction to ascertain fulfillment of export obligation but exclusively relate to conditions that require export of goods. Both the privileged imports and the obligated exports in those disputes were, indubitably, handled through customs ports and in accordance with the procedure laid down in Customs Act, 1962. Domain ..... X X X X Extracts X X X X X X X X Extracts X X X X
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