2017 (2) TMI 296 - HC - Customs

High Court upholds Tribunal's decision on EPCG Scheme violation appeal

The High Court dismissed the appeal against the Central Excise and Service Tax Appellate Tribunal's order regarding the violation of the Export Promotion ... EPCG Scheme - breach of condition of EPCG - import of Rolls Royce Ghost model car - the car was lying at the residence of one Prakash Shetty, Chairman and Managing Director of the appellant-assessee. Ordinarily, therefore, there was an appeal by the assessee and that is why he is styled as appellant in some part of the Tribunal's order, equally the Revenue was also an appellant. Held that: - The Revenue found that there is no basis for the presumption that the assessee would not complete the obligations and within the stipulated period. The Department could not prove that the actual user condition has been violated by disposing of or transferring the vehicle by sale or lease or in any other manner before completing the export obligation. There is no condition and which can be found to be violated by mere parking of a vehicle. If the vehicle has been imported, there is nothing that could be enforced as far as its parking or its plying within the State of Karnataka or its registration with a particular Regional Transport Office. Therefore, such of these conditions which are read into the licence and not found cannot be held to be violated. Appeal dismissed - decided against appellant. Issues:Appeal against Central Excise and Service Tax Appellate Tribunal's order regarding violation of Export Promotion Capital Goods (EPCG) Scheme in import of a vehicle.Analysis:The respondent-assessee was aggrieved by the Adjudicating Authority's order concluding a violation of the EPCG Scheme in importing a vehicle. The Tribunal considered three appeals against this order. The Revenue's appeal focused on the import of a Rolls Royce Ghost model car under exemption benefits. The investigation revealed the car was with the appellant's Chairman and Managing Director. The Tribunal's order allowed the assessee's appeal, stating no EPCG conditions were breached, and there were no mala fides involved.The Revenue contended that the Tribunal's order had perversity, relying on irrelevant evidence and ignoring crucial materials. They sought to enhance the penalty, claiming errors in the Tribunal's order. However, the Tribunal found no violation of EPCG conditions, as the obligations were to be completed in eight years, and action was taken within two and a half years. The Department failed to prove any violation of the actual user condition by disposing of the vehicle prematurely. The Tribunal's detailed analysis concluded that mere parking or use of the vehicle for business activities did not breach any conditions. The Tribunal's appreciation of evidence was found to be in line with established principles, dismissing claims of perversity in the appraisal.Ultimately, the High Court found no substantial question of law raised in the appeal and dismissed it. Consequently, the Notice of Motion was disposed of as nothing survived after the dismissal of the appeal.