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TMI Blog2024 (12) TMI 966X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant does indicate the year of manufacture of the goods as 2000, the EPCG authorisation did not place any restriction on the year of manufacture. The TUF scheme under which the alleged undue benefits were to be availed do not apply to the appellant because it had specifically not imported the goods under TUF. Whether the appellant had obtained any undue benefit under the TUF scheme of the Ministry of Textiles? - HELD THAT:- The answer is in the negative - Import of capital goods under EPCG with TUF is covered separately under paragraph 5.8 of the HBP. Whether there were any violation of the customs exemption notification no.103/2009-Cus which exempted the goods imported under an EPCG licence issued by the DGFT? - HELD THAT:- It needs to be pointed out that while DGFT formulated several schemes under which exemptions and concessions are given, the schemes of DGFT, by themselves cannot prevail over the charge of duty of customs under section 12 of the Customs Act, 1962. Therefore, for every scheme of DGFT, a corresponding exemption notification is issued under the Customs Act exempting goods imported under that scheme. Notification no. 103/2009-Cus issued under section 25(1) of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the entry made under the Act, i.e., the Bill of Entry. As we found that the Bill of Entry does not mention any year of manufacture at all, the imported goods do not have to be of any year of manufacture. Clearly, 111(m) does not apply to this case - Section 111(o) applies if the goods are exempted subject to some conditions and such conditions were not fulfilled and the non-fulfilment of such conditions was not sanctioned by the proper officer. In this case, the capital goods imported under EPCG were exempted subject to the condition that the goods manufactured using them will be exported and the export obligation was met and the DGFT issued an EODC to the appellant. Therefore, section 111(o) also does not apply to this case. Whether the penalty imposed under section 114A can be sustained? - HELD THAT:- This section applies to some cases where duty was not paid or short paid for certain reasons. Since it is found that there is no short payment of duty at all and the demand of duty cannot be sustained, penalty under section 114A also cannot be sustained. The impugned order, which has been issued ignoring both the facts of this case and the legal provisions cannot be sustained an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt assailing the orders of this Tribunal remanding the matters to the Commissioner. In some cases, the High Court upheld the remand orders of this Tribunal and those cases have since been pending before the Commissioner to decide. In some other appeals, including in this, the High Court set aside the order of this Tribunal and remanded the matter to this Tribunal to decide. 5. With respect to this appeal, Revenue had filed Customs Appeal No. 9/2018 which was decided along with several other appeals by the High Court by a common judgment and order dated 22.8.2019. The operative part of this judgment is as follows: 8.Accordingly, the impugned orders in the appeals are hereby set aside and all the matters are remitted to the CESTAT which shall proceed to examine and decide the merits of appeals without being influenced by Mangli Impex (supra). At the same time, the final decision in Mangli Impex (supra), would bind all parties- on the issue of jurisdiction, so that there is no question of its having to be re-agitated all over again. Furthermore, this Court is of the opinion that till final decision is taken in Mangli Impex (supra), no coercive action should be taken against the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cover the differential duty with interest and impose penalties. These proposals were confirmed through the impugned order. Submissions on behalf of the appellant 12. Shri B. L. Narasimhan, learned counsel for the appellant made the following submissions: (i) The impugned order travelled beyond the SCN inasmuch as it held that as per paragraph 5.8 of the Handbook of Procedures [HBP], only new and technologically superior machinery or second hand machinery not more than 10 years old could be imported as per para 5.8 of HBP and TUF Scheme. No such allegation was made in the SCN. (ii) The appellant had not violated any condition of the EPCG Scheme and discharged its export obligations fully. (iii) Once DGFT issues the EODC, it is not open to the Customs Department to investigate if the goods were covered under EPCG licence or not. (iv) The finding in the impugned order that EPCG licence was issued for import of capital goods manufactured in year 2000 is factually incorrect as the EPCG licence does not specify any year of manufacture of the capital goods to be imported. (v) The year of manufacture of the capital goods is irrelevant to the EPCG scheme as neither the EPCG scheme nor the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion did not place any restriction on the year of manufacture. The TUF scheme under which the alleged undue benefits were to be availed do not apply to the appellant because it had specifically not imported the goods under TUF. 19. The second question is whether the appellant had obtained any undue benefit under the TUF scheme of the Ministry of Textiles. The answer is in the negative. 20. Import of capital goods at concessional rate of duty of 3% under EPCG scheme is covered by the HBP paragraph 5.2, which, inter alia, states Second hand capital goods, without any restriction on age, may also be imported under the EPCG scheme . 21. Import of capital goods under EPCG with TUF is covered separately under paragraph 5.8 of the HBP. 22. The third question is whether there were any violation of the customs exemption notification no.103/2009-Cus which exempted the goods imported under an EPCG licence issued by the DGFT. 23. It needs to be pointed out that while DGFT formulated several schemes under which exemptions and concessions are given, the schemes of DGFT, by themselves cannot prevail over the charge of duty of customs under section 12 of the Customs Act, 1962. Therefore, for every ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... law gives the Commissioner of Customs any powers to either modify the licence issued by the DGFT or read something more into it. If investigations in any case indicate that a licence or authorisation has been obtained from DGFT by an importer or exporter wrongly by fraud, mis-declaration, etc., the Commissioner or other customs officer can pass such information and evidence to the DGFT who issued the licence so that he can take a decision. Customs officers, including the Commissioner, have no powers under the FTDR Act. 28. The fifth question is whether any alleged attempt to avail undue benefits under TUF scheme from the Ministry of Textiles would fall within the scope of the Customs Act. 29. We find no legal basis for such an action. If it emerges in any investigation, that anyone had availed or was attempting to avail undue benefits under a scheme of the Ministry of Textiles or some other ministries, the customs officers can convey the details to such ministry to consider and take appropriate decision. Even if one tried to avail ineligible benefit from Ministry of Textiles under TUF, that cannot be a ground, by any stretch of imagination, to demand duty, confiscate goods and impo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le to pay a penalty equal to the duty or interest so determined: ****** 36. This section applies to some cases where duty was not paid or short paid for certain reasons. Since we have found that there is no short payment of duty at all and the demand of duty cannot be sustained, penalty under section 114A also cannot be sustained. 37. To sum up: a) the appellant had not declared or mis-declared the year of manufacture of the capital goods in the Bills of Entry or any declaration before the Customs; b) the EPCG licence issued by the DGFT also does not place any restriction on the year of manufacture of the goods; c) the EPCG scheme in para 5.3 of HBP under which the appellant was issued the licence specifically permits import of second hand capital goods without any restriction; d) the Customs notification 103/2009-Cus which exempts the imported goods also does not place any restriction on the year of manufacture; e) the appellant had not applied under the TUF scheme which has been referred to in the impugned order; f) the Commissioner has no powers to modify the EPCG licence issued by the DGFT or read something more into it (such as restriction of the year of manufacture of the mac ..... X X X X Extracts X X X X X X X X Extracts X X X X
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