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TMI Blog2025 (2) TMI 813X X X X Extracts X X X X X X X X Extracts X X X X ..... levision network. The Export Import Policy [in short "EXIM policy"] for the period 1992-97 provided for an Export Promotion Capital Goods Scheme [in short "EPCG Scheme"] under Chapter VI A for the service sector. As per the scheme, the appellant was entitled for either concessional import or total exemption from payment of duty corresponding to the export obligation. 3. On their application, the Director General of Foreign Trade [in short "DGFT"] had issued the EPCG licence on 23.12.1993 in favour of the appellant for import of cable TV equipments valued at Rs. 9,79,51,255/- at the concessional rate of duty. The licence fixed an export obligation on the appellant at US$ 1,24,18,543 to be achieved within a period of 5 years from the date of issuance of the licence and towards the security for due performance of the export obligation, the appellant had furnished a bank guarantee to the tune of Rs. 3,90,55,765/-. 4. Even though as per the EPCG licence, the appellant was permitted to import equipments to the value of Rs. 9,79,51,255/-, the appellant had actually imported equipments worth only Rs. 6,14,39,613/-. Taking that into account, the DGFT by order dated 28.12.1998 had reduced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by its final order dated 13.08.2002 has fixed the duty liability of the appellant at Rs. 4,63,46,499/- and after deducting a sum of Rs. 2,69,45,639/- paid in compliance of the admission order, the balance duty payable was Rs. 1,94,00,860/-. The Commission had also granted immunity from the payment of fine, penalty, prosecution and payment of interest and further directed that the seized capital goods shall be released. 9. The Settlement Commission had come to the conclusion, that the appellant had achieved export obligation only at 14% based on the export performance up to 30.06.1998. The Settlement Commission had rejected the request to consider the earnings up to 22.12.1999 holding that the extension for export obligation period had been repeatedly rejected by DGFT. 10. Challenging the orders of the Settlement Commission, the Customs Department had preferred writ petition before this Court in W.P.No.29008 of 2003 and the appellant had preferred O.P.No.27493 of 2002 before the Kerala High Court with other consequential reliefs. Based on the orders of the Hon'ble Supreme Court dated 13.01.2006 in Transfer Petition (Civil) No.65 of 2005, O.P.No.27493 of 2002 was transferred f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unsel for the respondents 1, 3 to 6 contended that admittedly when the appellant had not fulfilled the export obligation as per the EPCG licence, they are not entitled for any concessional duty and they are liable to pay duty for the entire imported goods. However since already the exports realised to the extent of 14% had been taken note of and benefit has been granted, the appellant is bound to pay the differential duty as directed by the Commission. He further contended that when DGFT had granted opportunities for extending the period, the appellant had not come forward to opt the same and when the extension of the licence stood rejected, the Commission and the writ court had rightly taken note of the same and the findings arrived at are perfectly justified and needs no interference and sought for dismissal of the writ appeal. 16. Heard the rival submissions and perused the materials available on record. 17. The facts are not in dispute that the appellant who is a service provider in TV networks had been issued with EPCG licence by the DGFT based on the EXIM policy 1992-97. As per the EPCG licence, the appellant was entitled to import capital goods valued at Rs. 9,79,51,255/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ought to invoke the bank guarantee, the appellant had also initiated another writ petition to resist the same. 21. In view of those proceedings, the DGFT had issued show cause notices to the appellant for realising the differential duty towards the non fulfilment of export obligation. Challenging the show cause notices, the appellant had filed application before the first respondent Settlement Commission under Section 127B of the Customs Act, 1962 [hereinafter referred to as "the Act"]. In view of the issues being raised before the Settlement Commission, the proceedings initiated by the appellant before the Kerala High Court came to be closed, by only directing the Department not to take coercive proceedings and also the appellant to keep the bank guarantee alive. 22. Before the Settlement Commission, the appellant had filed documents to establish that they had achieved export obligations up to 30% within the extended period of licence i.e., till 22.12.1999. The appellant had also sent communications to the DGFT by requesting to provide the certificate in respect of the export obligations fulfilled by them. The DGFT by their communication dated 03.07.2001 had asked the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or 10 years in the cable network in Kerala. DGFT had further stated that the details furnished by the appellant in respect of some earnings do not specifically indicate whether those are from NRE accounts and as such the appellant was requested to furnish a break up of foreign exchange earnings category-wise as certified by the Chartered Accountant. 26. To be noted, earlier the Commission by their admission order dated 05.03.2001 had directed the appellant to pay a sum of Rs. 2,69,45,640/- being the admitted amount towards differential duty which the appellant had duly complied with. Further when the appellant had taken out two Miscellaneous Petitions to implead the DGFT as a party, the Commission by its order dated 30.04.2002 had recorded that it was premature at that stage to implead the DGFT and had directed the appellant to approach the DGFT to obtain a certificate or clarification to certify the additional quantity of exports which are being claimed up to December 1999. The Commission had also directed the jurisdictional Commissioner of Customs, Chennai in respect of the letter dated 24.08.2000 certifying the fulfilment of 14% of the export obligation. 27. The appellant by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 18th July, 2002 and not freely convertible currency. Though the advocate has requested to take the earnings subsequent to 22.12.1999 also when export obligation period expired as they had kept the bank guarantee alive, as required under PN No.3 (RE-01/1997-2002, dt. 31.03.2001), this 10.4 Question (iv): Interest: Except, Commissioner of Customs & Central Excise, Cochin, the other three respondents have vehemently urged that in terms of EXIM Policy, LUT/Bond and the Hand book of Procedures, the applicant has to bear the interest for the delayed payment of duty. In addition, at the time of final hearing on 5-7-2002, the representative of the Commissioner of Customs, Sea Port, Chennai submitted that by virtue of substitution of Para (iv) in Notification No.160/92-Cus. Dated 20-4-92 by clause 109 (1) read with 8th Schedule of the Finance Bill, 2001, the provisions therein have retrospective effect i.e., from 20-4-92 and since the applicant had failed to avail the extension for export under PN 5/99 dated 6-4-99 issued by DGFT, the applicant has to pay interest at the rate of 24% in terms of para 8 of PN 3/(RE 01)/1997- 2002 dated 31-3-2001 issued by DGFT." 29. From the above, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt obligation achieved till 20.12.1999 has also been filed. 33. When admittedly the EPCG licence has been extended for the period upto 20.12.1999 and also the appellant had received remittances from the NRE customers for cable subscriptions and when the export achieved upto 1998 had alone been taken into account, necessarily the remittances received by the appellant towards export obligation which according to the appellant has been achieved 30% has to be considered, as their obligation towards the payment of duty will proportionately reduce. 34. Though normally we would be reluctant to remand the matter at this considerable length of time, still, since from the certificates issued by Banks filed as indicated above, at least in one of the certificates issued by the Bank it is clearly stated that the remittances had been made by the NRE customers in to the appellant account, it would only be appropriate in the interest of justice to remand the matter back to the first respondent Settlement Commission to enable the appellant to file the bank statements which would establish the remittances received from the NRE accounts to the appellant account for the cable subscription towards re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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