TaxTMI 
TaxTMI 
2008 (12) TMI 137
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.... cars at concessional rate of duty of 5% basic Customs duty. The EPCG licence was issued for the 'travel agency'. They were required to fulfill the export obligation of about Rs. 2.06 crores. (b) The appellant claimed that they have fulfilled the export obligation and the claim was accepted by DGFT authorities vide communication dated 18-3-04. (c) Subsequently on 16-8-04, DRI seized the cars and show cause notice dated 15-2-05 was issued proposing confiscation of the cars and proposing to recover duty foregone on the ground that the conditions of notification as well as conditions of EPCG licence had been violated. The show cause notice makes reference to communication sent to DGFT authorities by the Customs authorities for violation ....
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....e Department. (c) As per the EXIM policy (para 5.4 of EXIM policy), earnings on export of services from the date of issue of licence can be taken into account for the purposes of fulfilling export obligation. The manner of fulfilling export obligation as prescribed in para 5.4 of EXIM policy within a period of 8 years from the date of issue of licence has been incorporated as one of the conditions in the notification itself. (d) He therefore submits that the goods have been used only for the intended purposes and that the export obligation has been fulfilled strictly in terms of said policy and the same have been accepted by the DGFT authorities. 4.2 In support of his submissions, he relied on the Final Order No. C/312/08, dated 12....
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....elow:- "In exercise of the powers conferred by sub-section (1) of Section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts goods specified in the Table annexed hereto from so much of the duty of customs leviable thereon which is specified in the First Schedule to the Customs Tariff Act, 1975 (51 of 1975) as is in excess of the amount calculated at the rate of five percent ad valorem and from the whole of the additional duty and special additional duty leviable thereon respectively under Section 3 and 3A of the said Customs Tariff Act. 2. The exemption contained in above paragraph, shall be subject to the following conditions, namely:-....
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....he date of issue of licence in the following proportions, namely- Provided further that where a sick unit notified by the Board for Industrial and Financial Reconstruction (BIF) is subsequently taken over by another unit for revival, the export obligation may be fulfilled within a period of 12 years from the date of issue of license: Provided also that the export obligation of particular block may be set off against the excess exports made in the said preceding block(s); "Export obligation",- (i) in relation to importers other than those rendering services, means export, to a place outside India, of products manufactured with the use of capital goods imported, assembled or manufactured in terms of this notification: Provided ....
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.... the compliance of the conditions of the notification independently. However we, in the present case, find that the notification has a link to provisions of the EXIM policy and the understanding of the DGFT authorities on the said provisions cannot be brushed aside without valid reasons. 6.5 Further, we have not been shown that the imported vehicles have been used for any purpose other than those related to travel and tour as stipulated in the EPCG licence. Further, the term tour and travel is a very wide term and it cannot be said that EPCG licence envisaged only the amounts collected by use of imported cars to be accounted towards export obligation under the said licence. If that was the intention, the licence could have been worded en....