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Export duty demand deemed premature, order of confiscation vacated, penalty unsustainable. Impugned order set aside, appeal allowed. The Tribunal found the demand of duty premature as the export obligation deadline had not yet passed. The demand for duty was set aside, leading to the ...
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Export duty demand deemed premature, order of confiscation vacated, penalty unsustainable. Impugned order set aside, appeal allowed.
The Tribunal found the demand of duty premature as the export obligation deadline had not yet passed. The demand for duty was set aside, leading to the vacating of the order of confiscation and the penalty imposed on the appellants being deemed unsustainable. The impugned order was set aside, and the appeal was allowed.
Issues involved: Import of capital goods under EPCG Scheme, benefit of Notification No. 28/97-Cus., non-fulfillment of export obligation, premature demand of duty, shifting of capital goods without permission.
Summary:
1. The appellants imported capital goods under the EPCG Scheme with the benefit of Notification No. 28/97-Cus. The duty was forgone on the condition that the goods would be used for production to fulfill the export obligation within a specified time frame. The export obligation deadline was extended by DGFT. The Commissioner demanded duty from the appellants due to non-fulfillment of export obligation, considering the recommendation for winding up of the Company. The appeal was made against this decision.
2. The Tribunal found the demand of duty premature as the export obligation deadline had not yet passed. The appellants had time until 23-2-2010 to fulfill the export obligation. Therefore, the demand for duty was set aside.
3. Another issue raised was the shifting of capital goods to a different location without permission, following a fire accident. The Tribunal noted that this action was a breach of license conditions, but it was the responsibility of the licensing authority (DGFT) to take action for such breaches. Since the DGFT had already extended the export obligation deadline, the Commissioner did not need to address this issue.
4. Due to the premature demand of duty being set aside, the order of confiscation was also vacated. Consequently, the penalty imposed on the appellants was not sustainable. The impugned order was set aside, and the appeal was allowed.
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