Tribunal upholds confiscation of Mercedes Benz under EPCG Scheme for non-compliance with post-import conditions.

The Tribunal upheld the confiscation of the Mercedes Benz Car imported under the EPCG Scheme due to non-compliance with post-import conditions, including failure to register the car as a tourist vehicle and fulfill export obligations. The applicants' arguments regarding relaxation of registration conditions and export fulfillment after registration were not accepted. The Tribunal stressed the importance of adhering to license conditions, utilizing imported vehicles for intended purposes, and meeting export obligations to avoid penalties and confiscation, emphasizing the significance of foreign exchange earnings in fulfilling export duties.

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Issues:
Import of Mercedes Benz Car under EPCG Scheme; Non-compliance with post-import conditions; Confiscation of car; Demand of duty; Imposition of penalty.

Analysis:
The judgment involves two appeals arising from the same impugned order regarding the import of a Mercedes Benz Car under the EPCG Scheme. The first applicant operates a resort in Kerala, and the second applicant is the Managing Director of the first applicant. The car was imported using an EPCG license but was not registered as a tourist vehicle as required by the license. Customs officers conducted investigations, seized the vehicle, and issued a show-cause notice under Section 111(o) of the Customs Act for non-compliance with post-import conditions. The matter was adjudicated, appealed to the Tribunal, remanded for de novo consideration, and adjudicated again by the Commissioner, resulting in the confiscation of the car, redemption fine, duty demand, and penalty imposition.

The main objection raised in the show-cause notice was the non-registration of the car as a tourist vehicle, failure to render services to fulfill export obligations, and non-maintenance of required records. The applicants argued that the DGFT relaxed the registration condition for past cases and fulfilled the export obligation after registering the car as a tourist taxi. They cited relevant policy circulars and legal precedents to support their case.

The Revenue argued that the issues had been decided in previous cases and that non-compliance within the prescribed time limit justified the proceedings initiated by customs authorities. The Tribunal considered the legality of the seizure at the time and the sustainability of the adjudication proceedings. It noted that the car was not registered as a tourist taxi for over six months, indicating non-compliance with the license conditions. The Tribunal emphasized the importance of using the car for activities earning foreign exchange and directed the applicant to make a pre-deposit of Rs. 14,00,000 within six weeks.

The Tribunal also addressed the applicant's request to reduce the bank guarantee amount in light of the pre-deposit requirement. The judgment highlighted the significance of complying with specific license conditions, using the imported vehicle for intended purposes, and fulfilling export obligations to avoid penalties and confiscation. The decision underscored the need for strict adherence to post-import conditions under the EPCG Scheme and emphasized the importance of foreign exchange earnings in discharging export obligations.

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