TaxTMI 
TaxTMI 
2007 (4) TMI 476
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....der the EPCG Scheme in terms of Notification No. 29/97-Cus. dated 1-4-97. Revenue issued Show Cause Notice to the appellant for violation of the conditions prescribed at proviso (a) to the Condition No. 5 of the said Notification. In terms of the said condition, the EPCG licence holder should have imported minimum CIF value of Rs. 1/- crore within a period of two years. The Show Cause Notice proposed to confiscate the impugned goods under Section 111(o) of the Customs Act. Penalty under Section 112(a) was also proposed. An addendum to the Show Cause Notice was issued for demanding customs duty amounting to Rs. 10,52,673/-. Appropriate interest as provided in the Notification was also demanded. There was also a proposal to appropriate an amo....
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....e extent of 50% of total imports made by them for the block period ending 4-2-2004. (iv) The total export obligation to be fulfilled by the year 2006 was Rs. 6.4 crores and during the first two block years, only 50% of the this amount i.e. Rs. 3.2 crores was to be fulfilled, whereas they have fulfilled export obligation worth Rs. 4.28 crores. (v) The EPCG scheme allows the licence holder to purchase capital goods covered under the licence from the domestic manufacturer instead of importing them. For this purpose, the licence is invalidated in respect of the goods to be procured domestically. In the present case, the invalidation is for" automatic cone winder". The licence was amended to this extent.....
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....ave not fulfilled the condition of minimum import of Rs. 1 crore within a period of two years. Therefore, the Commissioner was right in holding that the impugned goods are liable for confiscation. The duty demand is in order. The appellants are liable for penalty and payment of interest as provided in the Notification. 5. We have gone through the records of the case carefully. The issue in the present appeal relates to the interpretation of Customs Notification No. 29/97 read with EXIM Policy. 5.1 The EPCG scheme provides for import of capital goods under concessional rate of duty subject to fulfilment of export obligation to be fulfilled over a period of eight years reckoned from the date of issue of licence. The export obl....
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.... :- (a) With an obligation to export products of electronics, food processing, garments, leather, sport goods, gem and jewellery, agriculture, animal husbandry, floriculture, horticulture, pisciculture, viticulture, poultry, sericulture, bio-tech, engineering, textile and chemical sectors, or (b) To tourism industry for rendering services, the minimum value together with the value of the spares specified in the Table annexed hereto shall be rupees one crore : Provided further that in case of licences issued with an obligation to export products of software sector, the minimum value together with the value of the spares specified in the Table annexed hereto shall be rupees ten lakhs : ....
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....licy. If a supply to EPCG licence holder is considered as deemed export, logically it follows that as far as the EPCG licence holder is concerned the receipt of goods from domestic supplier amounts to deemed import. Moreover in terms of Para 6.8, there is a provision for sourcing the capital goods from a domestic manufacturer instead of importing them under the EPCG scheme. When such a provision is there, denial of benefit under the scheme on the ground that procurement from domestic supplier would not be considered for purposes of condition 5(a) of the Notification renders the scheme meaningless. It should be borne in mind that if an EPCG licence holder has a contract with a domestic manufacturer for supply of capital goods, the dome....