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Issues: Whether duty demand for alleged failure to satisfy export obligation and Net Foreign Exchange Earnings could be sustained after the Development Commissioner had granted de-bonding and recorded positive cumulative NFE.
Analysis: The unit had been de-bonded by the Development Commissioner after finding positive cumulative NFE in the relevant block period. The Tribunal held that, in such circumstances, Customs could not independently reopen the question of fulfilment of the export obligation or negative NFE and raise a demand without the Development Commissioner first taking action on the alleged violation. The binding departmental circulars also required the matter to be settled by the Development Commissioner before duty could be confirmed. Since that prerequisite was absent, the proceedings were held unsustainable.
Conclusion: The demand was not sustainable and the appeal was allowed in favour of the assessee.
Final Conclusion: Once the Development Commissioner has accepted compliance and permitted de-bonding, the revenue authorities cannot proceed independently to confirm duty on the same alleged EOU violation.
Ratio Decidendi: Where the Development Commissioner has conclusively accepted compliance with export obligation and granted de-bonding, customs authorities cannot confirm a duty demand for alleged EOU or FTP violation unless the Development Commissioner has first initiated or determined the breach in accordance with the binding circulars.
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