Custom, Excise & Service Tax Tribunal
Nehru Place Hotels Ltd., vs C.C. New Delhi (Import & General) on 19 January, 2026
CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL
NEW DELHI
PRINCIPAL BENCH- COURT NO. I
Customs Appeal No. 259 of 2011
(Arising out of Order-in-Original No. 01/APSS/CC/DRI/NCH/2011 dated 31.01.2011
passed by the Commissioner of Central Excise (Adjudication), New Delhi.)
Nehru Place Hotels Ltd ....Appellant
International Trade Tower,
Nehru Place, New Delhi-110019
Versus
Commissioner of Customs, ....Respondent
New Custom House, Near IGI Airport, New Delhi-110037 WITH Customs Appeal No. 260 of 2011 (Arising out of Order-in-Original No. 01/APSS/CC/DRI/NCH/2011 dated 31.01.2011 passed by the Commissioner of Central Excise (Adjudication), New Delhi.) Satish Kumar Sood MD, ....Appellant Managing Director Nehru Place Hotels Ltd International Trade Tower, Nehru Place, New Delhi-110019 Versus Commissioner of Customs, ....Respondent New Custom House, Near IGI Airport, New Delhi-110037 WITH Customs Appeal No. 261 of 2011 (Arising out of Order-in-Original No. 01/APSS/CC/DRI/NCH/2011 dated 31.01.2011 passed by the Commissioner of Central Excise (Adjudication), New Delhi.) Amit Rai Sood ....Appellant Director Nehru Place Hotels Ltd International Trade Tower, Nehru Place, New Delhi-110019 Versus Commissioner of Customs, ....Respondent New Custom House, Near IGI Airport, New Delhi-110037 WITH Customs Appeal No. 262 of 2011 (Arising out of Order-in-Original No. 01/APSS/CC/DRI/NCH/2011 dated 31.01.2011 passed by the Commissioner of Central Excise (Adjudication), New Delhi.) Yoginder Dhawan ....Appellant The then Vice President(Finance) International Trade Tower, Nehru Place, New Delhi-110019 Versus 2 C/259-264/2011 Commissioner of Customs, ....Respondent New Custom House, Near IGI Airport, New Delhi-110037 WITH Customs Appeal No. 263 of 2011 (Arising out of Order-in-Original No. 01/APSS/CC/DRI/NCH/2011 dated 31.01.2011 passed by the Commissioner of Central Excise (Adjudication), New Delhi.) Ajay Enterprises Pvt Ltd ....Appellant S-1, American Plaza, International Trade Tower, Nehru Place, New Delhi-110019 Versus Commissioner of Customs, ....Respondent New Custom House, Near IGI Airport, New Delhi-110037 AND Customs Appeal No. 264 of 2011 (Arising out of Order-in-Original No. 01/APSS/CC/DRI/NCH/2011 dated 31.01.2011 passed by the Commissioner of Central Excise (Adjudication), New Delhi.) Sushma Prakash ....Appellant 33, Sunder Nagar, New Delhi-110019 Versus Commissioner of Customs, ....Respondent New Custom House, Near IGI Airport, New Delhi-110037 APPEARANCE:
Shri Kishore Kunal, Shri Anuj Kumar, Ms. Vidhi Goel and Shri Bhavi Midha, Advocates for the Appellant Shri N.M. Goyal, Authorised Representative of the Department CORAM:
HON'BLE MR. JUSTICE DILIP GUPTA, PRESIDENT HON'BLE MR. P.V. SUBBA RAO, MEMBER (TECHNICAL) DATE OF HEARING/ DECISION: January 19, 2026 FINAL ORDER NO's. 50161-50166/2026 JUSTICE DILIP GUPTA Customs Appeal No. 259 of 2011 has been filed by Nehru Place Hotels Ltd1 to assail that portion of the order dated 21.02.2011 passed by the Commissioner of Central Excise (Adjudication), New 1 the appellant 3 C/259-264/2011 Delhi2 that imposes duty liability and penalty upon the appellant and also redemption fine under section 125 of the Customs Act, 19623.
2. Customs Appeal No. 260 of 2011 has been filed by Satish Kumar Sood, Managing Director of the appellant, to assail that portion of the order dated 21.02.2011 passed by the Commissioner of Central Excise (Adjudication), New Delhi that imposes duty liability with penalty upon the appellant.
3. Customs Appeal No. 261 of 2011 has been filed by Amit Rai Sood, Director of the appellant, to assail that portion of the order dated 21.02.2011 passed by the Commissioner of Central Excise (Adjudication), New Delhi that imposes duty liability and penalty upon the appellant.
4. Customs Appeal No. 262 of 2011 has been filed by Yoginder Dhawan, Ex-employee of the appellant, to assail that portion of the order dated 21.02.2011 passed by the Commissioner of Central Excise (Adjudication), New Delhi that imposes duty liability and penalty upon the appellant.
5. Customs Appeal No. 263 of 2011 has been filed by Ajay Enterprises Pvt Ltd, subsequent purchasers of Mercedes Benz Car, to assail that portion of the order dated 21.02.2011 passed by the Commissioner of Central Excise (Adjudication), New Delhi that confirms the duty liability and penalty upon the appellant with redemption fine under section 125 of the Customs Act.
6. Customs Appeal No. 264 of 2011 has been filed by Ajay Enterprises Pvt Ltd, subsequent purchaser of Mercedes Benz Cars, to assail that portion of the order dated 21.02.2011 passed by the Commissioner of Central Excise (Adjudication), New Delhi that
2 the Commissioner
3. the Customs Act 4 C/259-264/2011 confirms duty liability with redemption fine under section 125 of the Customs Act.
7. It transpires from the records that the appellant was providing hospitality services from the five star hotel in Delhi run by the appellant to various guests, including international guests and was earning foreign exchange.
8. The appellant applied for EPCG license to import three LINCOLN and 3 BMW cars. The EPCG license was granted to the appellant on 20.08.1999 and the appellant imported one LINCOLN car and 3 BMW cars as well as some spare parts for one of the BMW car.
9. The appellant also obtained another EPCG license on 01.03.2022 to import four Toyota Camry Cars.
10. In the mean time, on 25.03.2002, the first EPCG license granted to the appellant was amended and the appellant was also granted permission to import two Mercedes cars.
11. The appellant claims to have satisfied the import conditions and, therefore, submitted an application on 19.07.2002 for discharge of export obligation under License no. 1 and the DGFT granted Export Obligation Discharge Certificate.
12. The first license and the bond furnished at the import stage were also cancelled by the Customs Authorities.
13. The DGFT also granted Export Obligation Discharge Certificate for the License No. 2 and the bonds furnished by the appellant at the stage of import were also cancelled by the Customs Authorities.
14. It, however, transpires that in April, 2008 the Directorate of Revenue Intelligence initiated an investigation into the Licenses obtained by the appellant. The imported cars under License no. 2 were seized on 25.08.2008 under section 110 of the Customs Act. Likewise, 5 C/259-264/2011 the Mercedes cars imported by the appellant under the License No.1 were also seized under section 110 of the Customs Act.
15. Subsequently, a show cause notice dated 12.05.2010 was issued to the appellant and nine others. The appellant and the other nine co-
noitcees filed their replying denying the allegations made in the show cause notice. However, the Commissioner (Adjudication) passed an order dated 21.02.2011 whereby the cars were confiscated and demands of duty were confirmed with penalty.
16. Shri Kishore Kumar, learned counsel for the appellant submitted that as the issues involved in theses appeals are covered by a Division Bench decision of this Tribunal in Interglobe Enterprises Limited vs. Commissioner of Customs, New Delhi4 as wells as a decision of a Division Bench of this Tribunal in M/s. Bestech Hospitalities Pvt Ltd vs. Commissioner of Customs (Preventive), New Delhi 5, the appeals should be allowed.
17. Shri N.M. Goyal, learned authorized representative appearing for the department, however, supported the impugned order and submitted that it does not call for any interference in this appeal.
Learned authorized representative also placed reliance upon a judgment of the Supreme Court in Surya Samudra Holiday Resorts Pvt Ltd vs. CC (Export) Mumbai6
18. The submissions advanced by the learned counsel for the appellant and the learned authorized representative appearing for the department have been considered.
19. A perusal of the decision of the Tribunal in Interglobe Enterprises clearly indicates that the issue involved in this appeal is indeed covered by the said decision of the Tribunal. The Tribunal also distinguished the decision of the Supreme Court in Surya Samudra 4 Customs Appeal No. 124 o f2010 decided on 20.11.2025 5 2025(8) TMI 509-CESTAT NEW DELHI 6 2010 (256)ELT 433(Tri-Mumbai) 6 C/259-264/2011 Holiday Resorts that has been relied upon by the learned authorized representative appearing for the department.
20. The Tribunal in paragraph 12 of the decision examined whether the export obligation were fulfilled only by the usage of the imported cars and after referring to the communication dated 29.11.2005 issued by the DGFT held as follows:
"13. This clearly establishes that the foreign exchange earned by the appellant by use of the imported cars and other services as a tour operator fell well within the parameters of the EPCG Scheme. Further, our attention has been drawn to the letter dated 27.12.2006 issued by DGFT wherein it was clarified as given hereinafter:
"
Dt: 27.12.2006 The Joint Director General Of Foreign Trade, Bangalore [Kind Attn: Shri M. Balagangadharan, Joint DGFT] Subject: Import of Cars under EPCG Scheme - reg.
Sir, Please refer to your letter No 07/21/EPCG MISC. Statement/06 dated 3.11 2006 with regard to the DRI communication under their reference No.S/IV/43/2005/861 dated 4.7 2006 received in that office.
2. The matter has been examined in detail. In their communication DRI has raised two issues:-
(i) The cars imported under the erstwhile Policy registered in individual name should first be got registered as tourist and commercial vehicles and foreign exchange earnings after such conversion alone should be considered towards fulfilment of EO.
(ii) Export earnings through alternate products and services, like room rent, income from sale of food, beverages etc. should not be considered towards discharge of EO.
3. As regards 2(i) above mandatory requirement of registration of cars imported under EPCG as 7 C/259-264/2011 Tourist/Commercial vehicles has been notified on 14.6.2006 and included as a part of the Foreign Trade Policy 2004-09. Prior to this date, there was no such stipulation in the Foreign Trade Policy Therefore, foreign exchange earnings by use of these vehicles not registered as Commercial/Tourist vehicles cannot be denied the benefits of considering the same towards fulfilment / discharge of EO so long as no other misuse/transfer of such a vehicle/registration of such vehicle in the name other than the licence holder is reported. As regards the mandatory registration of these vehicles as Tourist/Commercial vehicles prior to this date, there appears to be violation of Motor Vehicles Act on account of use of private registered vehicles for commercial purposes. However, this aspect has to be looked into by the Regional Transport Authority concerned and DRI is at liberty to approach RTA concerned for seeking appropriate action to be taken by that authority on this score.
4. As regards 2 issue at 2(ii) above, in the working of hotel, tourism and travel service industry the vehicles are part of an overall package drawn by these service providers for the tourists. This package may include hotel accommodation, food, beverages and travel cost and charges for utilizing imported vehicles would not be billed separately to the tourist. It is therefore not practically possible for these sectors to show export earnings separately from use of these vehicles. Therefore, the views expressed by the DRI or this score cannot be accepted and all benefits including all earnings for providing hotel accommodation, sale of food and beverages, apart from transportation of the tourist, should be considered towards discharge of export obligation against vehicles imported under EPCG scheme. This is however subject to the condition that no part of the sale proceeds have been paid in free foreign exchange to any other service provider for providing add on services for hotel accommodation etc xxxxx xxxxx xxxxx xxxxx
6. This issues with the approval of Competent Authority Yours faithfully (M.K. Parimoo) Joint Director General of Foreign Trade"
14. In view of the clarification, we hold that the appellant had completed his export obligation by providing services related to Travel & Tourism industry."8
C/259-264/2011
21. The decision of the Tribunal in Surya Samudra relied upon by the learned authorized representative appearing for the department was distinguished by the Tribunal in paragraphs 17 and 18 of the decision and they are reproduced below:
"17. Perusal of the Apex Court decision clearly holds that the Tribunal's findings that the fulfilment of Export Obligation Certificate was not 'determinative' was not sustained. In the context of the instant case, we find that the majority opinion in the said decision of the Tribunal had held that the holding of EODC issued by the competent authority, viz., DGFT was not determinative of fulfilment of export obligation. The Apex Court has set- aside this very observation of the Tribunal, on which the Ld AR has placed reliance in the instant case. The term "determinative factor" in a judgment refers to an element, circumstance, or condition that has a decisive influence or directly controls the outcome of the case before the court. It essentially means the cause or consideration that is pivotal in deciding the legal issue or dispute; in other words, it is the "but for" or "because of"
factor whose existence or absence conclusively settles the point at issue. It is a crucial element, influence, or circumstance that decisively shapes or controls the nature, outcome, or direction of a situation, decision, or event. The Courts have interpreted the term "determinative" particularly in the context of contracts, as referring to something that can be brought to an end or terminated, especially at the unilateral will of a party without reference to breach or other circumstances. In legal terminology, "determinative" also means sufficient to decide something, such as a question of fact or law.
18. In the instant case, the holding of the EODCs was determinative of completing their export obligations towards the import of the three cars. We note that copies of logbooks of all the 3 vehicles were submitted to the departmental authorities establishing the use of the said three vehicles for transporting guests and used in other tourism related activities. The Department 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."
22. Similar view was taken by a Division Bench of the Tribunal in Bestech Hospitalities. The relevant paragraphs of this decision dealing with the issues are reproduced below:
"19. The issue that arises for consideration in these appeals is whether the demand could be confirmed with consequent penalties for violation of 9 C/259-264/2011 the conditions of the Notification, when the EODC was issued in favour of the appellant evidencing fulfilment of export obligation and it has not been cancelled till date.
20. The first submission that has been advanced by the learned counsel for the appellant is that since that export obligation had been fulfilled by the appellant within the time granted by the DGFT and EODC was issued and received by the appellant, duty could not have been demanded from the appellant when proceedings had not been initiated by DGFT against the appellant for cancelling the EODC. The contention, therefore, that has been advanced is that once the DGFT authorities exercised their jurisdiction and satisfied themselves that the export obligation was fulfilled by the appellant within the stipulated time and redeemed the bank guarantee, the customs department does not have any jurisdiction to sit in judgment over the EODC issued by the DGFT."
23. After relying upon the decision of the Supreme Court in Titan Medical Systems Pvt Ltd vs. Collector of Customs, New Delhi7 and the decision of the Delhi High Court in Design Company & Ors vs. Union of India and ors8, the Division Bench held:
"24. It is not in dispute that EODC had been issued to the appellant by DGFT on 30.06.2008. It is also not in dispute that the said EODC has not been cancelled till date by DGFT.
25. In Titan Medical Systems the Supreme Court observed that once a licence was issued and it was not questioned by the licencing authority, the customs authorities cannot refuse exemption on an allegation that there was mis-representation. The Supreme Court further observed that if there was any mis-representation, it was for the licencing authority to examine and take steps.
26. The aforesaid decision of the Supreme Court in Titan Medical Systems was followed by the Delhi High Court in Design Company. The Delhi High Court held that it would be wholly impermissible for the customs authorities to ignore the MIES certificate or deprive holder of the said certificate of the benefits that can be claimed in the scheme, absent any adjudication or declaration of invalidity by the DGFT. The Delhi High Court further held that there cannot be a parallel or a contemporaneous power inhering in two separate sets of authorities with respect to the same subject. If an instrument 7 2003 (151) E.L.T. 254 (S.C.) 8 W.P.(C) 14477/2022 decided on 22.11.2024 10 C/259-264/2011 owes its origin to the FTDR Act, than it is the DGFT which will have to inquire and any action for recovery of benefits claimed and availed would have to necessarily be preceded by the component authority and under the FTDR Act. The Delhi High Court further held that Customs authorities would not have the jurisdiction to question the validity of a certificate referable to the FTDR Act.
27. In this view of the matter, the customs authority could not have confirmed the demand in the absence of any adjudication by the DGFT cancelling the EODC certificate earlier issued by it certifying that the export obligation had been fulfilled by the appellant. The Customs department would, therefore, not have any jurisdiction to sit in judgment over the EODC issued by the DGFT."
(emphasis supplied)
24. In view of the aforesaid two decisions of the Tribunal in Interglobe and Bestech Hospitalities, it has to be held that the Customs Authorities could not have confirmed the demand in the absence of any adjudication by the DGFT cancelling the EODC certificate earlier issued by it certifying that the export obligation had been fulfilled by the appellant.
25. The confirmation of demand and imposition of penalties upon the other appellants, cannot, therefore, be sustained and are set aside.
26. The impugned order dated 21.02.2011, so far as it relates to the six appeals, deserves to be set aside and is set aside. The six appeals are, accordingly, allowed.
(Order dictated in the Open Court) (JUSTICE DILIP GUPTA) PRESIDENT (P.V. SUBBA RAO) MEMBER (TECHNICAL) Shenaj