TaxTMI 
TaxTMI 
2023 (10) TMI 760
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.... jurisdictional GST authorities under GST No. 27AADCN0843L1ZC. They had obtained an Advance Authorization/license No.0310746001 dated 20.08.2013 for import of goods at concession rate of duty. The said EPCG license was issued to the appellants for 3% concessional duty as 'service provider' involving export obligation for a FOB value of exports of US$2,731,313.37 or Rs.11,94,94,960/- with export obligation period of 8 years. The amount of duty saved was also given as Rs.1,49,36,870/-. On the basis of specific intelligence developed by the Directorate of Revenue Intelligence (DRI), Lucknow Zonal Unit (LZU), that the appellants have not fulfilled the export obligation in respect of the imports under Advance Authorisation/License, in violation of EXIM policy, an investigation was initiated. On completion of the investigation, show cause proceedings were initiated against the appellants for confiscation of the imported goods, demand of duty payable but for the Advance Authorisation/ license concession availed and for imposition of penalties. Learned Commissioner of Customs upon adjudication of the case passed an Orderin- Original dated 17.11.2021 confirming the adjudged demands, confisc....
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....sistant Commissioner of Customs, DEEC Monitoring Cell of the jurisdictional Mumbai Customs Commissionerate vide letter dated 23.01.2018 had sought the details of fulfilment of export obligation against the Advance Authorisation. The appellants sought extension of time for fulfilment of export obligation by applying to the Policy Relaxation Committee of the DGFT and informed the same to the Customs authorities. The appellants claimed that they had also written to the DEEC cell of Customs about their willingness to pay the differential duty of customs on account of non-fulfilment of export obligation and also claimed to have taken a demand draft for Rs.9,10,69,946/- on 19.09.2018. However, due to the advice of the DEEC Cell about the incorrect amount of differential duty, they had submitted revised letter on 21.09.2018 to the DEEC Cell of Customs with a demand draft for Rs.8,85,52,866/- being the differential duty long with applicable interest. The appellants also claim to have written to the DGFT on 26.09.2018 informing the duty payment and confirmation of the correctness of such duty paid and requesting to inform the shortfall, if any. Directorate of Revenue Intelligence (DRI), Luc....
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....have violated the provisions of Customs notification No.64/2008-Cus. dated 09.05.2008, in terms of the show cause proceedings or not, and the impugned order confirming the adjudged demands, confiscation of goods and penalty is sustainable. In order to examine these in detail, the allegations raised in the show cause notice dated 11.06.2012 are extracted and the same are as follows: "Now, therefore M/s Namco Industries Pvt. Ltd. (IEC No. 1109004737) are hereby called upon to show cause to the Commissioner of Customs (Exports), New Custom House, Ballard Estate, Mumbai 400001 as to why: a) The imported goods of having assessable value of Rs.33,90,97,340/- (Rupees Thirty Three Crore Ninety Lakh Ninety Seven Thousand Three Hundred and Forty only) should not be held liable for confiscation under Section 111(o) of the Customs Act, 1962 read with conditions of the Bond executed in terms of Section 143 of the Customs Act, 1962 read with Notification No.96/2009-Cus dated 11.09.2009 as amended. b) The Duty Foregone amount of Rs.6,46,63,619/- (Rs. Six Crore Forty Six Lakh Sixty Three Thousand Six Hundred Nineteen only) along with applicable interest should not be rec....
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....pugned order, learned Commissioner has found that as the appellants could not complete the entire export obligation within the stipulated period of time allowed under the Foreign Trade Policy (FTP) and Customs notification No.96/2009-Customs dated 11.09.2009, it amounted to failure of the appellants to fulfil the export obligation as per Customs Notification No.96/2009-Customs and that there was no sanction of the proper officer for the non-observance of such conditions and thus the imported goods became liable to confiscation under Section 111(o) of the Customs Act, 1962. Further, learned Commissioner had also concluded that such contraventions of the provisions of Customs notification No.96/2009- Customs dated 11.09.2009 and FTP, have resulted in the confiscation of imported goods, and the act of omission on the part of the appellants in such failure to fulfil export obligation have rendered them liable for penalty under Section 112(a) ibid. As the Customs notification No.96/2009-Customs dated 11.09.2009 and the conditions of import specified therein forms the base for examination of the fact whether these have been complied with or violated by the appellants resulting in consequ....
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....clearance of the imported materials executes a bond with such surety or security and in such form and for such sum as may be specified by the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, binding himself to pay on demand an amount equal to the duty leviable, but for the exemption contained herein, on the imported materials in respect of which the conditions specified in this notification are not complied with, together with interest at the rate of fifteen percent per annum from the date of clearance of the said materials; (v) that in respect of imports made after the discharge of export obligation, if facility of CENVAT Credit under CENVAT Credit Rules, 2004 has been availed, then the importer shall, at the time of clearance of the imported materials furnish a bond to the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, binding himself, to use the imported materials in his factory or in the factory of his supporting manufacturer for the manufacture of dutiable goods and to submit a certificate, from the jurisdictional Central Excise officer or from a specified chartered accountant within six....
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....urat, Surajpur, Tirupur, Tuticorin, Udaipur, Vadodara, Varanasi, , Waluj (Aurangabad) or through the Land Customs Station at Agartala, Amritsar Rail Cargo, Attari Road, Changrabandha, Dawki, Ghojadanga, Hilli, Jogbani, Mahadipur, Nepalganj Road, Nautanva (Sonauli), Petrapole, Ranaghat, Raxaul, Singhabad and Sutarkhandi or a Special Economic Zone notified under section 4 of the Special Economic Zones Act, 2005 (28 of 2005): Provided that the Commissioner of Customs may with in the jurisdiction , by special order, or by a Public Notice, and subject to such conditions as may be specified by him, permits import and export from any other seaport/airport/inland container depot or through any land customs station; (viii) that the export obligation as specified in the said authorization (both in value and quantity terms) is discharged within the period specified in the said authorization or within such extended period as may be granted by the Regional Authority by exporting resultant products, manufactured in India which are specified in the said authorization and in respect of which facility under rule 18 (rebate of duty paid on materials used in the manufacture of resul....
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....ied to the satisfaction of the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, as the materials which were imported. 3. Notwithstanding anything contained in this notification, the actual user condition specified in condition numbers (viii) and (x) shall not be applicable in respect of authorisation issued for import of raw sugar for imports made from the 17th February,2009 till 30th September, 2009 and the export obligation may also be fulfilled by procuring white sugar from any other factory with effect from the 17th February, 2009. Explanation, - For the purposes of this notification, (i) "Dutiable goods" means excisable goods which are not exempt from central excise duty and which are not chargeable to 'nil' rate of central excise duty; (ii) "Foreign Trade Policy" means the Foreign Trade Policy 2009-2014, published by the Government of India in the Ministry of Commerce and Industry vide notification No.1 /2009-2014, dated the 27th August 2009 as amended from time to time; (iii) "Licensing Authority or Regional Authority" means the Director General of Foreign Trade appointed under section 6 of ....
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.... (vi) Authorisation holder executes a bond with surety or security binding himself to pay on demand an amount equal to the duty leviable on the imported goods, but for this exemption, in the event non compliance of the conditions of the notification. 8.3. From the records of the case, it is clear that the appellants have produced the Advance Authorisation at the time of import of goods through the notified sea port Mumbai, and executed the Bond for Rs.47,58,98,750/- along with necessary undertaking before the Customs authorities in respect of Advance License No. 0310746001 dated 20.08.2013. There is no case of sale or transfer of advance authorisation in this case. Thus, we find that prima facie the appellants have fulfilled the conditions (i), (ii), (iv) and (vi). In respect of the conditions (iii) and (v), since the competent authority as per the Notification No.96/2009-Customs is the DGFT, who would issue an export obligation fulfilment or discharge certificate, redemption, regularization certificate upon scrutiny of exports and other relevant details as in ANF 4F document, these conditions will be able to be met upon production of such certificate from DGFT authorities.....
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....mited, towards the customs duty and interest payable on account of non-fulfilment of export obligation by submitting it in writing to the Deputy Commissioner of Customs, DEEC Monitoring Cell of New Custom House, Mumbai. However, the calculation sheet and copy of challans for payment of government dues given by the said DEEC Monitoring cell indicated the duty amount payable on account of non-fulfilment of export obligation in respect of the appellants as Rs.5,55,48,140/- towards duty and Rs.3,30,04,726/- towards interest in file No. S/16-DEEC-49/2018-19 GR.VII M.Cell. The same was paid by the appellants vide Demand Draft / Manager's Cheque No.478831 dated 21.09.2018 to the government exchequer. Subsequently, on the basis of the DRI, LZU's letter DRI/LZU-CI/Int-10/2018 indicating the shortfall in payment of differential customs duty, the appellants paid Rs.91,15,479/- on 21.12.2018. Due to delay in deposit of the amount submitted by the appellants, further interest of Rs.1,18,16,872/- was also paid on 04.02.2019. Later, on further reminder of DRI, LZU vide letter F. No. S-16-Misc.155/ 2017-18 Gr.VII M.Cell dated 19.07.2019 for payment of remaining interest amount of Rs.58,464/-, the ....
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....ment of export obligation suggesting recovery of duty foregone, seeking approval by competent authority and for initiating necessary investigation. It is also seen from the RUD No.2&3 that the search proceedings by DRI, LZU at the premises of factory and office took place on 23.10.2018 and 24.10.2018 in initiation of the investigation. However, it is on record that the jurisdictional Customs authorities monitoring the Advance Authorisations i.e., DEEC Cell of New Custom House, Mumbai had already initiated action on 23.01.2018 much before the intelligence was even approved and the appellants have already paid the differential customs duty and interest to the government account on 21.09.2018 before the actual investigation proceedings was initiated by search on 23/24.10.2018. In fact, the appellants have duly taken the Demand Draft for higher amount on 19.09.2018 as calculated by them and it is on account of the DEEC Monitoring cell calculation and duty challans, they had paid lesser amount of duty and interest thereon. Subsequently, whenever the short payment was pointed out by the DRI, LZU or Customs authorities, the same was duly paid by the appellants within a reasonable pe....