Tribunal grants waiver under EPCG scheme based on export obligations upheld by bank guarantee

The Tribunal allowed the applications for waiver of pre-deposit of differential duty and penalties under the EPCG scheme. It held that as long as export obligations were fulfilled, the appellants were entitled to the waiver. The Tribunal considered the validity of the scheme until 2018, the use of the car for transporting tourists, and revenue shown in foreign exchange for export obligations. The bank guarantee of Rs. 50 lakhs for provisional release of the car was deemed sufficient, and recovery was stayed pending appeal disposal, following a precedent where a similar favorable view was taken.

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Issues: Stay petitions for waiver of pre-deposit of differential duty, penalties under EPCG scheme.

Analysis:
1. Issue of Compliance with EPCG Scheme: The main appellant imported a car under the EPCG scheme, but the revenue authorities alleged improper benefit availed. The adjudicating authority confirmed a show cause notice for customs duty demand, interest, and penalties. The advocate argued that the appellant complied with EPCG scheme conditions, used the car for transporting tourists, and had time until 2018 to fulfill obligations. A bank guarantee of Rs. 50 lakhs was executed for provisional release of the car, still active, and considered sufficient for hearing and disposing the appeals on merits.

2. Contentions of the Departmental Representative: The Departmental Representative supported the lower authority's findings, suggesting the appellants should make deposits as a condition for hearing and disposing the appeals.

3. Judicial Analysis and Precedent: The Tribunal noted the EPCG scheme's validity until 2018 for fulfilling export obligations. Despite the car being in the main appellant's name in the hospitality business, revenue was shown in foreign exchange for committed export obligations. Referring to a similar case involving M/s. Goldfinch Hotels Pvt. Ltd., where a favorable view was taken, the Tribunal held that as long as export obligations are met, the appellants established a case for waiver of pre-deposit. Consequently, the applications for waiver were allowed, and recovery stayed pending appeal disposal.

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