Customs, Excise and Gold Tribunal - Bangalore
Sanghi Industries Ltd., Mr. Sudhir ... vs The Commissioner Of Customs (Export ... on 25 November, 2005
ORDER S.L. Peeran, Member (J)
Page 0238
1. All these appeals arise from a common OIO No. 366/2002 dated 23.10.2002 passed by the Commissioner of Customs (Export Promotion), Mumbai. The allegation against the appellants were that they had failed to fulfill the export obligation in terms of the EPCG licence issued to them by DGFT, New Delhi. They had imported Capital Goods and the allegation is that they had exported only a negligible extent of 7% of the export obligation and they have not discharged the same upto 08.12.1997 i.e. the last date of fulfillment of their export obligation under the said licence. The appellants had given various reasons which prevented them from fulfilling the terms of the licence. They had, in the meanwhile, made several Page 0239 attempts to get the extension of the period. The DGFT also did not accept their plea to extend the period in terms of licence. The appellants had filed an application before the Settlement Commission admitting their liability and the Settlement Commission, by their order No. 50A/2001 dated 04.10.2001, directed them to pre-deposit the duty liability in six installments. They had failed to comply with the said terms and hence, proceedings were initiated and the duties and penalties have been confirmed. The imported goods were also confiscated. However, they were given option to redeem the goods on payment of fine.
2. The contention of the appellant is that they have deposited the differential duty and complied with the terms of the order. They are seeking for setting aside the interest, penalty and RF. They contend that there is no provision in the Notification for confirming interest. As regards the imposition of fine and penalty, they rely on the ratio of the following judgments:
(i) Dencap Electronics Pvt. Ltd. v. CCE, Goa 2004 (174) ELT 241 (Tri.-Bang.)
(ii) Taurus Novelties Ltd. v. CC, Bangalore
(iii) Philips (India) Ltd. v. CC, Mumbai 2001 (137) ELT 697(Tri.-Mumbai)
(iv) Metropoli Overseas Ltd. v. CC, Bangalore
(v) Meirs Pharma (India) Pvt. Ltd. v. CC, Chennai
(vi) Dyna Lamps & Glass Works Ltd. v. Cc, Chennai
(vii) Fal Industries Ltd. v. Cc, Chennai It is contended by the Learned Counsel that in terms of the above cited judgments, the Tribunal has been pleased to set aside the imposition of penalty, interest and RF on the ground that if there are extenuating factors preventing the appellants from fulfilling the export obligation, then the same should be accepted and the order confirming penalties, the fine and interest should be set aside. Some of the reasons given for non-fulfillment of the export obligations are:
(a) Removal of Trade Barriers by a number of countries;
(b) Opening up of international market;
(c) Sudden collapse in the economies of the neighbouring countries and
(d) Devaluation of certain Asian currencies.
It is stated by the Counsel that all these factors resulted in the South East Asian countries exporting PVC coated Sheets to India at cheaper prices Page 0240 and during the relevant period i.e. 1993-1994, the appellants' products became uncompetitive. Therefore, in spite of their best efforts, they could not find suitable markets or orders for exporting their goods and, therefore, this resulted in non-compliance of the export obligation within the time stipulated. The learned Counsel submits that in view of the cited judgments, the penalty, interest and fine should be set aside.
3. The learned JDR defended the order and submitted that fine, penalty and interest should be retained.
4. On a careful consideration, we notice from the cited judgments that the Tribunal, in all the cited judgments, clearly held that fine, penalty and interest is not leviable in similar cases where the export obligation could not be fulfilled due to Global Economic crisis in Asia and particularly in South-East Asia. All these judgments set aside the penalties, interest and fine. The prayer of the appellants for setting aside the same is allowed. The fine, penalty and interest are set aside in the light of the cited judgments on the same issue.
(Operative portion of this Order was pronounced in open court on conclusion of hearing)