TaxTMI 
TaxTMI 
2026 (6) TMI 719
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...."), the promoting company, had been shown as the supporting manufacturer and that high sea sale agreements had been entered into between JPPL and KIL in respect of the imported goods. It further appeared to the Revenue that the export obligations under the aforesaid schemes had been shown to have been fulfilled through supplies made to M/s. Tara Holding Pvt. Ltd. (hereinafter referred to as "THPL"), a 100% EOU, stated to be under the control of KIL. 3. Pursuant thereto, investigation was initiated by DRI, Kolkata. During the course of investigation, it was noticed that JPPL had imported substantial quantities of LLDPE, HDPE, LDPE, PVC Resin and Polypropylene without payment of duty under Advance Authorizations and DFIAs issued by the DGFT, Kolkata and that KIL had been declared as the supporting manufacturer in the respective authorizations. It further emerged that JPPL had obtained five Advance Authorizations and thirteen Duty Free Import Authorizations against which export obligations were stated to have been discharged by way of deemed exports effected through KIL to THPL. 4. On the basis of the materials gathered during investigation, the Revenue entertained a view that t....
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....sition of penalty upon each of them under Section 112(a) of the Customs Act, 1962. 5.1. Upon adjudication of the aforesaid Show Cause Notice, the ld. adjudicating authority passed the Order-in-Original No. KOL/CUS/COMMISSIONER/ PORT/18/2019 dated 02.07.2019 (hereinafter referred to as the 'impugned order') and ordered as follows: - i) Confiscation of the goods valued at Rs.38,93,39,975/- (Rupees thirty eight crore ninety three lakh thirty nine thousand nine hundred seventy five only) imported as duty free from Kolkata Sea Port under the said Advance Authorizations and Duty Free Import Authorizations under Section 111(o) of Customs Act, 1962, allowing redemption on payment of Rs.4,00,00,000/- (Rupees four crore only) as Redemption Fine under Section 125 of Customs Act, 1962. ii) Confirmation of the duty demand amounting to Rs. 8,52,46,964/- (Rupees eight crore fifty two lakh forty six thousand nine hundred sixty four only) under Section 28(8) of Customs Act, 1962 and applicable interest under Section 28AA (erstwhile Section 28AB) of the Act ibid. iii) Imposition of penalty of Rs. 8,52,46,964/- (Rupees eight crore fifty two lakh forty six thousand nine h....
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...., the Appellant imported polymer raw materials with total CIF value of Rs. 67,51,85,463/- and duty foregone of Rs.14,97,51,922/- (Rs.9,84,42,093/- under AA and Rs. 5,13,09,829/- under DFIA). The transaction architecture was: (i) merchant-exporter (Appellant) tied with named supporting manufacturer (KIL); (ii) high-seas purchase of consignments sold by KIL to the Appellant under registered HSS agreements; (iii) discharge of export obligation by way of deemed exports to THPL, a 100% EOU under Chapter 7/8 of the FTP. This structure is expressly permitted by Para 4.1.3 read with Para 4.1.7 of FTP 2009-14, Para 4.04 of HoP (AA to merchant-exporter with supporting manufacturer); Para 8.2(b) (supply by DTA unit to EOU recognised as deemed export); and Para 8.3.1(ii) read with Para 4.28 of HoP (discharge of EO under AA/DFIA by deemed export to EOU on production of CT-3 and Central Excise attested invoice). 3.2 Upon completion of deemed export supplies, the DGFT, Kolkata, after due verification, issued Export Obligation Discharge Certificates (EODCs) for all 29 authorisations. On the strength of these EODCs, the customs bonds executed at the time....
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....authorities can demand duty on the ground of non-fulfilment of export obligation when EODCs have been issued by DGFT, Kolkata after due verification in respect of all 29 licences and have not been revoked? 8. Admittedly, the assessee has obtained EODC from DGFT and all the bonds were executed by the assessee has been duly discharged and discharged. In that circumstances, the demand against the assessee is not sustainable as held by this Tribunal in the case of Skipper Ltd. Vs. Commissioner of Customs (Port), Kolkata reported in (2025) 27 Centax 246 (Tri-Cal),wherein this Tribunal has observed as under : "8. In view of the above findings, we hold that the Appellant has not contravened the conditions of the exemption Notification No. 96/2009-Cus. dated 11.06.2009, as amended. As the appellant has discharged their export obligation and EODC has been issued by DGFT and the Customs authorities have also released the bond executed by them after satisfying that the appellant has fulfilled all the conditions, we hold that confirming the demand of Customs duty alleging violation of the conditions of the said Notification is bad in law. Therefore, we hold that the demand of....
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....rtment has led no evidence to the contrary. Hence, we hold that the appellant had completed his export obligation and the issuance of EODCs by DGFT are determinative of the same." As it is evident from the records that the assessee has obtained the EODC from the DGFT and all the bonds issued have also been discharged against 29 licences, therefore, the impugned demand is not sustainable against the assessee. The issue is answered in favour of the assessee. Issue No. (ii) Whether the demand can be sustained when the Central Excise Department, in five contemporaneous SCNs to THPL, has itself proceeded on the footing that goods were received by THPL - squarely contradicting the DRI's hypothesis of no-movement ? 11. We find that in this case, the allegation against the appellant is that they have not sent the goods to M/s THPL, who is the exporter. Therefore, the goods have been diverted in the domestic market, but the Revenue has issued the show-cause notice to M/s Tara Holdings Pvt. Ltd. (THPL) on 29.09.2011 alleging as under : "It is further indicated from the records that the said assessee had procured raw materials, namely, modified....
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.... (iv) are also answered in favour of the assesses. Issue No.(v) Whether extended period under Section 28(4) of the Customs Act, 1962 is invokable in the absence of any positive act of fraud, collusion, wilful misstatement or suppression? 13. In this case, the show-cause notice dated 29.08.2014 was issued during the period 2013.2014 by invoking extended period of limitation. We find that the above demand is barred by limitation as obtaining EODC from the DGFT by the assessee and the discharging of the bonds were well within the knowledge of the Revenue, therefore, the extended period of limitation is also not invokable in the facts and circumstances of the case. These issues are answered in favour of the assessee. Issue No. (vi) Whether the recommendation under Section 135 at Paragraph 46 of the OIO can survive once the foundation of the adjudication falls? 14. We find that the adjudicating authority has re-commended the proceedings under Section 135 of the Customs Act, 1962, whereas it has been established by the assessee that they have obtained EODC from the DGFT and as per the show-cause notice dated 29.08.2014, THPL received the goods....