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TMI Blog2003 (3) TMI 218X X X X Extracts X X X X X X X X Extracts X X X X ..... he Bank Guarantee and the balance should be recovered from the party. 2. This is the second round of litigation before the Tribunal as the matter was once remanded for de novo consideration as the adjudicating authority had earlier decided the case ex parte. The brief facts of the case are that the appellants had obtained Zero Duty EPCG licence No. P/CG/2156076 dated 12-9-95 for import of textile machinery for the CIF value of Rs. 23,40,87,598/- with a validity period of two years and the validity period of the licence was extended by one year i.e. up to 12-9-98. The appellants imported textile machinery worth Rs. 8,41,06,842/- at nil rate of duty. The DGFT had directed the party to pay Customs duty along with interest. The import of the said machinery was in violation of the Zero duty EPCG licence, Customs Notification No. 111/95 read with para 38 of the Import policy inasmuch as the appellants did not import machinery to the threshold value of Rs. 20 crores as stipulated in Customs Notification No. 111/95 dated 5-6-1995. They had not done so, even during the extended period of the licence. Out of the import of machineries worth Rs. 8,41,06,842/- machineries worth Rs. 3,38,40,84 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d cannot be isolated or de-linked. Therefore, when the licensing authorities have permitted conversion of the EPCG licence under 0% scheme to 15% duty, the prerogative of which vest with the licensing authorities, and that cannot be questioned. 3. They have also stated in the miscellaneous petition submitted on 8-4-2002 that the DGFT vide their letter F.No. 18/104/AM 96/EPCG II/896 dated 21-2-2002 has communicated that conversion of the EPCG licence No. P/CG/2156076 dated 12-9-1995 into 15% duty licence is in order and is retrospective and that 24% interest need not be insisted upon by the Customs since the same is not payable by the firm in the present case. 3.1 They have also submitted written submission in which they have reproduced certain finding portion of the learned Commissioner which reads as under : "So far as their having produced a letter from the DGFT converting 0% licence to 15% licence is concerned, it is seen from the letter of DGFT that the said amendment has retrospective effect. The amendment is for the prospective import only. It does not cover the goods already imported. The amendment is not applicable to the goods already imported. As the goods had alrea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... well reasoned one. She has also invited our attention to letter dated 4-4-2000 from the Commissioner to the Chairman, CBEC wherein the facts and circumstances which culminated the order-in-original have been explained. It was also mentioned therein that the DGFT's communication that no interest was payable was not correct, and a request was made to take up the matter with the DGFT to issue necessary clarification. Accordingly, the request of the Customs was considered by the DGFT and it was clarified by the DGFT that in view of the fact that order of adjudication has already been passed by the Customs necessary action as warranted under the Customs Act, 1962 can be taken against the party. She has invited our attention to the letter bearing F. No. 18/104/AM 96/ECG-II/96 dated 19-4-2000 by which it was made clear to the appellants that since they have imported capital goods of CIF value of less than Rs. 20 crores, they cease to be Zero Duty beneficiary and they were required to pay Customs duty with 24% interest. She also invited our attention to the letter bearing F.No. 18/104/AM/96/EPCG II/1665 dated 22-8-2000 addressed to the appellants by the DGFT wherein under para 2 it has bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e goods the importer produced only the original licence for zero duty. On a later date, i.e. after clearance of the goods, the appellants approached the DGFT for conversion of the Zero duty licence into 15% duty licence and the DGFT ultimately converted the Zero duty licence into 15% duty licence with effect from 29-4-1999, on a condition that the appellants are liable to pay Customs duty plus 24%, interest. The appellants have been making correspondence with the DGFT to treat the conversion of the Zero duty licence into 15% duty licence and also for non payment of interest. From the records it is seen that DGFT had acceded to their request vide communication bearing F.No. 18/104/AM96/EPCG-II dated 21-2-2002 by which the DGFT has informed the appellants that conversion of the zero duty licence into 15% duty licence is in order and is retrospective and 24% interest need not be insisted upon by the Customs as the same is not payable by the appellants. In the mean while, the present impugned order, demanding duty, confiscation of the goods and imposition of redemption, imposition of penalty and ordering interest etc. as noted above came to be passed. We observe that upon failure on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay 24% interest has not been withdrawn and hence the same is valid. We are not able to countenance this plea firstly because we have already held that the DGFT is not vested with the power to waive payment of interest when it is a specific condition envisaged in the Notification issued by the competent authority and secondly the DGFT itself by its latest communication dated 2-7-2002 clarified the position that Customs Department is free to take action as warranted under the Customs Act, as decided by the EPCG Committee in its meeting held on 24-5-2002. 8. Now coming to the question as to whether confiscation of the goods and imposition of redemption and penalty is proper and legal, we are of the considered opinion that in the present case, it is an admitted fact that there is clear violation of para 38 of the Import Export Policy for the year 1992-97 dealing with Zero duty licence as well as Customs Notification No. 111/95 dated 5-6-95 inasmuch as appellants have only imported textile machinery worth Rs 3,38,40,845/- (Three crores, thirty eight lakhs, forty thousand, eight hundred forty five) through the Tuticorin port as against the Zero duty licence of the threshold value of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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