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TMI Blog2008 (9) TMI 356X X X X Extracts X X X X X X X X Extracts X X X X ..... nce conditions, as the said vehicle was not used for the purpose for which it was imported. The main contention of the Revenue is that foreign exchange should be earned by use of the car. There is absolutely no evidence that the car had been installed and the installation certificate was also not produced immediately. No record of the use of the car for the purpose for which it was imported had been maintained. Investigations had been carried out and on the basis of the investigations of the DRI, show cause notices were issued to the appellants. The Commissioner came to the conclusion that there is clear violation of the EPCG licence conditions and also the policy as well as the violation of the conditions of the Customs notification under which the vehicle was imported. Hence, he held that the imported car is liable for confiscation under Section 111(o) of the Customs Act. He confirmed the customs duty foregone amounting to Rs. 24,83,393/- under Section 28(2) of the Customs Act read with sub-section (2) Section 125 of the Act. Redemption fine of Rs. 6.5 lakhs was imposed. Interest under Section 28AB was also demanded. The penalty on the appellant M/s. M Far Hotel equal to the amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espondent did not appreciate that the cost of the car was "factored into the cost of packages of certain luxury rooms" and the vehicle was used for complimentary travel of the persons checking into such rooms. The order has not appreciated this critical aspect and the manner of reckoning the export obligation as per the circular of the DGFT dt. 27-12-2006. (h) The Ld. Respondent has not appreciated that the vehicle was imported and used for the purposes of the Hotel Industry as a whole. (i) The Ld. Respondent has not appreciated that a private vehicle was not barred from being used for the trade or business of the owner as per the Motor Vehicles Act, 1988. (j) The Ld. Respondent has not appreciated that the appellant had al ready applied to the office of the licensing authority for discharge of their export obligation and issue of export obligation discharge certificate (EODC). This request is pending consideration by the said office of the licensing authority. 6. The learned Departmental Representative reiterated the impugned Order-in-Original. She stated that there is a very clear violation of the conditions of the EFCG import licence. The vehicle ought to have been registere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olutely clear and would also facilitate registration. b. In all past cases where Export Obligation Discharge Certificate (EODC) has not been obtained by 30.06.2008 and where vehicles were not registered as Tourist Vehicles, EPCG authorization holders will get them registered as Tourist Vehicles, by 31-08-2008. Regional Authorities of DGFT will monitor and ensure compliance. 3. This issues with the approval of DGFT. [D.G.F.T. Policy Circular No. 7(RE-2008)/2004-09, dated 7-5-2008] 9. Further, our attention was also invited to the DGFT clarification. 10. The clarification of the DGFT in respect of the use of the imported car is reproduced in the letter given below: No. 01/94/180/518/AM07/PC-1/770 Government of India Ministry of Commerce & Industry Department of Commerce Directorate General of Foreign Trade Udyog Bhawan, New Delhi Dt: 27-12-2006 To The Joint Director General of Foreign Trade Bangalore [Kind 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hicles imported under EPCG scheme. This is however subject to the condition that no part of the sale proceeds have been paid in free foreign exchange to any other service provider for providing add on services for hotel accommodation etc. 5. These instructions may be followed scrupulously and wherever the EODC etc. has been cancelled based upon the recommendations of DRI or any other authority, the same may be reviewed and dealt with in line with the instructions contained in this letter. However, wherever there is a specific order from any court of law in this regard, the same may be brought to the notice of the Headquarters. 6. This issues with the approval of Competent Authority. 11. On going through that 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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