Applicants' Non-Cooperation Leads to Case Reversal

The Settlement Commission found that the applicants were not cooperating and were obstructing the proceedings. Therefore, the Commission decided to send the case back to the proper officer for disposal in accordance with the Customs Act, as if no application under Section 127B had been made.

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Issues Involved:
1. Non-fulfillment of export obligation under the EPCG scheme.
2. Demand for payment of differential customs duty and interest.
3. Request for installment payment facility and waiver of interest and penalties.
4. Compliance with Settlement Commission's interim order.
5. Furnishing of adequate security for the admitted liability.

Detailed Analysis:

1. Non-fulfillment of Export Obligation under the EPCG Scheme:
The applicants imported goods under an EPCG license with a total assessable value of Rs. 11,99,87,733/-. They were required to fulfill an export obligation equal to four times the value of the imported goods within five years. However, they only exported goods worth Rs. 20,44,256/-, which is about 0.43% of the required export obligation. Despite the failure to meet the export obligation, the applicants did not inform the concerned authorities periodically.

2. Demand for Payment of Differential Customs Duty and Interest:
A Show Cause Notice was issued demanding a customs duty of Rs. 3,52,66,040/- and interest at 24%, amounting to Rs. 4,34,94,815/-. The applicants admitted a duty liability of Rs. 3,52,66,040/- but requested an adjustment for the amount already recovered through the encashment of a Bank Guarantee. The Settlement Commission noted that the applicants had partially fulfilled their export obligation and reassessed the differential duty accordingly.

3. Request for Installment Payment Facility and Waiver of Interest and Penalties:
The applicants requested to pay the balance amount of Rs. 1,99,66,228/- in quarterly installments over three years and sought waivers for interest and penalties. They cited financial constraints and the risk of plant closure, job losses, and stakeholder funds being at risk. However, the Commission found the request unreasonable and emphasized the need for expeditious settlement.

4. Compliance with Settlement Commission's Interim Order:
The applicants failed to make the payment as ordered by the Commission. They submitted a letter requesting more time and installment facilities, but the Commission found that the applicants were not cooperating and were obstructing the proceedings by not furnishing a list of properties to secure the admitted liability.

5. Furnishing of Adequate Security for the Admitted Liability:
The Commission required the applicants to furnish adequate security for the payment of the admitted liability. The applicants failed to comply and did not provide a list of properties. The Commission emphasized that the Settlement Commission is not a forum for delaying revenue collection and that the applicants were adopting dilatory tactics.

Conclusion:
The Settlement Commission found that the applicants were not cooperating and were obstructing the proceedings. Therefore, the Commission decided to send the case back to the proper officer for disposal in accordance with the Customs Act, as if no application under Section 127B had been made.

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