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TMI Blog2016 (12) TMI 764X X X X Extracts X X X X X X X X Extracts X X X X ..... ense but is to be invoked for contraventions arising from the failure to discharge obligation or the conditions of import. Therefore, and in consequence, it is not open to the Customs authorities to withdraw the benefit of exemption or to curtail the period within which export obligation is to be fulfilled. It would appear that, in the present case, the adjudicating authority has done so. The impugned order has held that the appellant is incapable of meeting the export obligation and, thereby, Pre-empted that possibility well before the period of export obligation. This is patently improper. The learned Authorized Representative made an earnest plea that the matter to be remanded back to the original authority to enable the adjudicating authority to consider the various developments relating the amendment of the license and arrive at a proper conclusion on the notice issued by him. We have rendered a finding on the flexibility of movable capital goods as well as on the error in alleging diversion of the goods. We have also noted that it is not open to the Customs authorities to initiate action for non-fulfillment of export obligation until the period of export obligation is comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imports of capital goods at a concessional rate. 3. The authorization for import by the appellant, specifying the address of the importer at Samalkot, was registered at Kolkata Customs House and bond executed for due compliance with the conditions of the exemption notification. The contention of Revenue is that the appellant did not comply, and could not have complied, with the basic conditions. It is alleged that the importer failed to submit the installation certificate from the jurisdictional Central Excise officer, or an independent Chartered Engineer, within the stipulated period of six months prescribed in condition no. 7 of paragraph 2 of the said notification. It is also the contention of Revenue that, on inspection of the address specified in the authorization, one of the 'crawler cranes' was found to have been diverted to a site at Nagpur which, allegedly, is a contravention of condition no. 2 of paragraph 2 of the said notification forbidding the transfer of capital goods, in any manner, before fulfillment of export obligation. Revenue further contends that the appellant, not being a producer of goods, could not have fulfilled the prescribed export obligation; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earing despite the appellant being a well-known developer of infrastructure with ongoing projects across the country and hence reachable by the long arms of the law at any time. It was further submitted that due cognizance of the request for adjournment would not have been detrimental to Revenue. Appellant also contends that the initiation of the proceedings was unwarranted and premature as the scheme itself prescribes a period of eight years for fulfillment of the export obligation and the presumption in July 2003 - barely two years after the commencement of the obligation period - that the appellant would not be able to fulfill the prescribed obligation demonstrates pre-determined bias. It was also argued that the 'crawler cranes' having been imported against a valid authorization, was not susceptible to action under section 111 of Customs Act, 1962 inasmuch, as none of the enumerated contraventions, including post-importation conditions, had even remotely been established. According to the appellant, the manner of discharging the export obligation had been amended to incorporate services that were not restricted to those considered by the adjudicating Commissioner. The a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for non-compliance with specific conditions of a notification issued under the Customs Act, 1962 any condonation allowed by any other agency or department/organization of the Government of India does not have to be accorded any heed. 8. Having heard both sides and having gone through the records relevant to the case, we take note that owing to non-response by the appellant to the show-cause notice and their non-participation in the personal hearing on the prescribed dates, the impugned order has been passed ex parte. Despite this evident default on the part of the appellant being put forward as justification for not deferring a long-delayed matter, the adjudicating authority is not absolved of its responsibility to ensure a fair prosecution of the dispute by re-scheduling the personal appearance. It would appear that the adjudicating authority having initially fixed the date for 12th December, 2014 proceeded to fix another date well in advance of that requested by the appellant. We are constrained to note that, in his eagerness to dispose off the adjudication, the Commissioner has taken great pains to contrive the crossing of the hurdle - 'the three adjournments' - by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as it was found to be deployed at another location. It would appear that Revenue conjectures that any locational displacement can be presumed to be a transfer. We do not find this trend of thought to be tenable because of the manifold modes by which transfer may occur; as the goods under the scheme are importable by actual users, it necessarily follows that such goods should remain in the physical possession and control of the importer till the export obligation has been duly discharged. Transfer of installed machinery to another entity or location may be sufficient to infer that the condition has been breached. It is not reasonable to expect mobile 'crawler cranes' to be subject to such an inference. Movable capital goods, exempted as they are from the requirement of permanent installation, cannot be denied deployment whenever and wherever required in pursuance of the objective of the scheme. Learned Senior Advocate drew our attention to the addresses in the import-export code certificate in which the Nagpur address is specified. The scheme is endowed with the inherent flexibility of utilization even for domestic use in the midst of complying with the export obligation. L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g authority to monitor and certify that the prescribed export obligation has been complied with. A valid licence, with validly approved amendments, is beyond the scope of scrutiny by customs authorities; having requested the licencing authority to withdraw the authorization, the adjudicating Commissioner should not have proceeded to precipitate matters at that stage. The decision of the Hon'ble High Court of Bombay in Bhilwara Spinners v. Union of India [2011 (267) ELT 49 (Bom)] which, while setting aside the decision of the Larger Bench of the Tribunal, is pellucid: 12) The basic dispute in the present case is, whether the DGFT who is the licensing authority under the Foreign Trade (Development Regulation) Act, 1992 is empowered to amend the licence with retrospective effect. 13) Rule 8 of the Foreign Trade (Regulation) Rules, 1993 reads thus :- Rule 8 - Amendment of licence - The licencing authority may on its own motion or on an application by the licensee, amend any licence in such manner as may be necessary or to rectify any error or omission in the license. 14) From the aforesaid rule, it is evident that the licensing authorities have the power to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orted in 2000 (123) E.L.T. 486 (P H). In that case, the licence was amended by the licensing authority to the prejudice of the licence holder. In that context, it was held that the licence cannot be amended retrospectively so as to make the imports already made pursuant to the licence illegal. In the present case, the licence is converted at the instance of the licence holder that too much after the expiry of the licence period and much after the customs authorities initiated action for not complying with the condition No. 5 in the Notification No. 29/97. Therefore, it is clear that the conversion of licence was made with a view to operate retrospectively so that the petitioner was not obliged to fulfill condition No. 5 in Notification No. 29/97 and consequently, no duty, interest and penalty could be recovered from the petitioner. 22) The Jt. DGFT has filed an affidavit duly affirmed on 8-3-2011 to the effect that para 2.5 of the Foreign Trade Policy empowers the DGFT to exempt any person or class or category of persons from any provision of Foreign Trade Policy or any procedure and that the amendments carried out by the DGFT cannot be the subject matter of scrutiny and cha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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