Customs, Excise and Gold Tribunal - Tamil Nadu
Sharpscan And Prints Ltd. vs Commissioner Of Customs on 8 November, 2006
ORDER P.G. Chacko, Member (J)
1. The appellants had imported certain capital goods under EPCG Scheme claiming the benefit of Notification No. 28/97-Cus. dated 1-4-1997. The goods were warehoused. When the Ex-Bond Bill of Entry dated 25-1-2000 was assessed, duty of Rs. 1,65,44,826/- was forgone in terms of the Notification. Condition 4 of the Notification was that the entire production of goods by the importer by making use of the capital goods should be exported in discharge of the export obligation noted in the EPCG licence. Accordingly the export obligation should have been discharged within five years from 25-1-2000. This period was subsequently extended by DGFT upto 23-2-2010 as per order dated 20-9-2004. Thus the appellants had abundant time upto 23-2-2010 for completing their exports. Though this fact was noted by ld. Commissioner in the impugned order, he proceeded to demand duty from the appellants in respect of the imported goods on the ground of non-fulfilment of export obligation, bearing in mind the fact that BIFR had recommended for winding up of the Company. Ld. Commissioner has also ordered confiscation of the goods and imposed penalty on the appellants. Hence the present appeal.
2. After hearing both sides and considering their submissions, we find that the demand of duty on the appellants is premature inasmuch as the ground raised in the impugned order (that the export obligation had not been fully discharged) cannot be tenable until after expiry of the time granted by DGFT for discharge of the export obligation. Admittedly time is available to the appellants upto 23-2-2010 for fulfilling the export obligation in relation to the imported capital goods.
3. Ld. SDR submits that another violation by the importer was noted by the Commissioner. Though the capital goods were installed in the licensed premises, the same were subsequent shifted to another place (due to fire accident) without permission. According to ld. SDR, the importer ought to have obtained permission from the Department or from the DGFT for shifting the machinery from the licensed premises. We find that the EPCG licence specified the place for installation of the machines imported thereunder. If the machines were installed in any other place during the validity period of the licence, it was certainly a breach of one of the licence conditions. But it was for the licensing authority (DGFT) to take action against the licensee for such breach. It is on record that the DGFT extended the period for discharge of export obligation as per order dated 20-9-2004. Presumably, that authority must have enquired into the conduct of the licensee in relation to the various licence conditions, while relaxing one of the conditions of the licence (extension of time for discharge of export obligation). The Commissioner of Customs need not worry about this aspect.
4. For the reasons already noted, we set aside the demand of duty as premature. As the order of confiscation is also on the same ground as the one on which duty was demanded, it will also stand vacated. It goes without saying that the penalty cannot subsist when the goods are not liable for confiscation. In the result, the impugned order is set aside and the appeal is allowed.
(Order dictated and pronounced in open Court)