2013 (9) TMI 857 - HC - Customs

Court sets aside duty demand order under Customs Act, finding petitioner complied with Export Promotion Capital Goods Scheme.

The Court set aside the duty demand order confirming a duty demand under the Customs Act, finding the petitioner had fulfilled export obligations as per ... Confirmation of Duty Demand – export obligation - EPCG scheme - Revenue was of the view that the assessee did not complied with the conditions of the Export Promotion Capital Goods Scheme (EPCG) - Held that:- revenue had not disputed the fact that the extension letter, dated 4-2-2010, had been issued by the Foreign Trade Development Officer, extending the obligations period, from eight years to ten years. Thereafter, a redemption letter, dated 18-4-2012, had also been issued by the Ministry of Commerce and Industry, Government of India, stating that the petitioner had discharged the export obligations. - demand set aside - decided in favor of assessee. Issues: Challenge to duty demand under Customs Act based on Export Promotion Capital Goods Scheme; Validity of order confirming duty demand; Jurisdiction to challenge order under Article 226 of the Constitution of India.Analysis:1. Challenge to Duty Demand: The writ petition challenged the order of the respondent confirming a duty demand of Rs. 22,94,284 along with interest under the Customs Act, 1962. The demand was based on the petitioner's alleged failure to comply with the Export Promotion Capital Goods Scheme, specifically the obligation to export goods manufactured using imported capital goods before a specified date.2. Export Promotion Capital Goods Scheme Obligations: The petitioner contended that the obligation period for fulfilling export requirements had been extended from eight years to ten years by an order from the Foreign Trade Development Officer. The petitioner claimed to have exported goods within the extended period and obtained a redemption letter from the Ministry of Commerce and Industry, Government of India, indicating compliance with the scheme.3. Jurisdiction to Challenge Order: The respondent argued that the petitioner should have challenged the impugned order before the Commissioner of Customs, the appropriate appellate authority, rather than filing a writ petition under Article 226 of the Constitution of India. However, the Court noted that the petitioner had received an extension letter and a redemption letter, both supporting compliance with the scheme, which were not considered by the respondent before passing the order.4. Court's Finding and Decision: After considering the submissions and evidence, the Court found that the petitioner had fulfilled the export obligations as per the scheme, supported by the extension letter and the redemption letter. The Court set aside the impugned order of the respondent dated 25-4-2011, stating that the petitioner should not be compelled to file a formal appeal before the Commissioner of Customs. Consequently, the writ petitions were allowed, with no costs imposed, and connected matters were closed.This detailed analysis of the judgment highlights the key issues, arguments presented by both parties, and the Court's decision based on the evidence and legal principles involved in the case.