2003 (5) TMI 456 - AT - Customs

Customs duty appeal dismissed for failure to meet export obligations. Excessive penalties reduced.

PUNSUMI FOILS & COMPONENTS LTD. Versus COMMISSIONER OF CUS., JAIPUR

The appeal against the Commissioner of Customs' order confirming a Customs duty demand, confiscation of goods, and penalties on the appellants was ... Natural justice - Hearing - Demand Issues:Violation of natural justice in passing the order.Analysis:The case involves an appeal against the order of the Commissioner of Customs confirming a demand of Customs duty, confiscating imported goods, and imposing penalties on the appellants. The appellants were an Electronics Hardware Technology Park (EHTP) unit under the 100% Export-Oriented Scheme. They imported goods without duty payment under a specific notification but failed to meet the export obligations as required. The appellants were required to export goods worth a specified amount within a stipulated period, but they fell significantly short of the target. The approval granted to the party for duty-free imports was canceled due to non-compliance with conditions, leading to the demand for Customs duty, confiscation of goods, and imposition of penalties. The appellants did not respond to show-cause notices or attend hearings, leading to the impugned order being passed based on available records.The main ground of challenge in the appeal was the alleged violation of natural justice. The appellants claimed that the impugned order was passed in violation of natural justice principles. However, it was found that the appellants did receive the show-cause notice but failed to respond or attend hearings. The plea of violation of natural justice was deemed to lack merit, and the challenge was rejected. The appellants' failure to comply with the export obligations as per the license conditions was established. They ceased to be a 100% Export-Oriented Unit (EOU) beyond a certain date, rendering them ineligible for the benefits of the notification allowing duty-free imports. The demand for Customs duty was upheld, but the redemption fine and penalty imposed were considered excessive. Consequently, the redemption fine and penalty amounts were reduced in light of the circumstances. The appeal was disposed of with the revised penalty amounts.In conclusion, the judgment addressed the issues of natural justice violation, non-compliance with export obligations, and the eligibility for duty-free imports. The decision upheld the Customs duty demand while reducing the redemption fine and penalty amounts. The appellants' failure to fulfill export obligations led to the cancellation of benefits and the imposition of duties and penalties, highlighting the importance of compliance with regulatory requirements in such schemes.