2014 (7) TMI 1123 - AT - Central Excise

Tribunal remands case for clear determination on export obligations, emphasizing procedural correctness and fairness

GEOTECH DIGITAL BHARAT PVT. LTD. Versus C.C.E. & S.T., AHMEDABAD-III

The Tribunal allowed the appeal by remanding the case, emphasizing the need for a clear determination from STPI regarding the appellant's compliance with ... Demand of Customs duty - Violation of principle of natural justice - Held that:- STPI after recording the way the export obligations were calculated, in unnumbered paragraph No. 4 has specifically stated that the unit met its export obligations while in the next unnumbered paragraph No. 5, they have stated that the appellant should pay the applicable duty on imported capital goods inputs, etc. There seems to be inherent contradiction in the letter issued by the STPI unless there definite conclusion by the authority whether the appellant has met with the export/ obligation or not in our considered view assessee appellant cannot be saddled with duty liability and consequences. We gainfully refer to the Circular No. 21/95-Cus., dated 10-3-1995 wherein Board has clarified specifically that the demand of duty should be confirmed only, after definite conclusion has been arrived at by the Development Commissioner. In the case in hand, STPI is the final authority to come to a conclusion as to whether the appellant fulfilled the export obligation or not. - unless the STPI comes to a definite conclusion, the impugned order passed by the adjudicating authority seems to be premature. - adjudicating authority is directed to reconsider the issue afresh after following the principles of natural justice and also seeking definite conclusion from the STPI as to whether the appellant has fulfilled with the export obligation as was committed, when they undertook the activities in STPI or not. - Decided in favour of assessee. Issues involved: Demand of Customs duty foregone on goods/inputs imported by the appellant for technology park without complying with export obligations.Analysis:1. The issue in this case revolves around the demand of Customs duty foregone by the appellant on goods/inputs imported for a technology park without fulfilling export obligations. The Tribunal had previously remanded the matter to the adjudicating authority for reconsideration based on a letter from STPI, Gandhinagar. The impugned order confirmed the demand, stating non-compliance with export obligations by the appellant.2. Upon reviewing the letter from STPI dated 4th June, 2010, the Tribunal observed an inherent contradiction. While the STPI mentioned that the unit met its export obligations, they also indicated that the appellant should pay the applicable duty on imported goods. Referring to Circular No. 21/95-Cus., the Tribunal highlighted that duty demand should only be confirmed after a definite conclusion by the Development Commissioner or final authority, which in this case is STPI.3. The Tribunal concluded that without a definite conclusion from STPI, the adjudicating authority's order appeared premature. Consequently, the adjudicating authority is directed to re-examine the issue, ensuring adherence to natural justice principles and obtaining a clear determination from STPI regarding the appellant's compliance with export obligations undertaken at STPI.4. Ultimately, the appeal was allowed by way of remand, emphasizing the importance of a conclusive decision from STPI regarding the appellant's fulfillment of export obligations. The Tribunal's decision underscores the significance of a definitive conclusion by the final authority before confirming duty liabilities, ensuring fairness and procedural correctness in the adjudication process.