EPCG tourist-use requirement denied waiver of pre-deposit where no evidence showed compliant use of imported BMW cars.

EPCG imports of BMW cars were required to be used only for tourist purposes, and the export obligation for service providers had to be met through receipt of payment in freely convertible foreign currency for services rendered using the capital goods. As the applicants produced no log books or other documentary evidence showing tourist use, and no evidence of foreign exchange receipt for services rendered through the cars, no prima facie case was made out for waiver of pre-deposit of customs duty, interest and penalty. Pre-deposit of the customs duty was directed, while pre-deposit of interest and penalty was waived on compliance.

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Issues: Whether the applicants made out a prima facie case for waiver of pre-deposit in respect of customs duty, interest and penalty in relation to BMW cars imported under the EPCG Scheme and required to be used for tourist purposes.

Analysis: The Notification governing the EPCG import required the vehicles to be used only for tourist purposes and the export obligation for service providers to be met by receipt of payment in freely convertible foreign currency for services rendered through use of the capital goods. The applicants failed to produce log books or other documentary evidence showing use of the vehicles for tourist purposes and also failed to show receipt of foreign exchange for services rendered through use of the cars. On the material available, the Court found no prima facie basis to accept the plea that the vehicles were used in the manner required by the scheme.

Conclusion: The applicants were directed to pre-deposit the customs duty amount, while pre-deposit of interest and penalty was waived upon compliance.

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