Custom, Excise & Service Tax Tribunal
Vency Creation vs Ahmedabad on 14 August, 2018
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
West Zonal Bench, Ahmedabad
Appeal No. C/11517/2015-DB
(Arising out of OIA No. AHM-CUSTM-000-APP-028-15-16 dated 07.05.2015
passed by Commissioner of CUSTOMS-AHMEDABAD
Vency Creation - Appellant
Vs.
C.C - Ahmedabad - Respondent
Represented by:
For the appellant : Shri S. Suriyanarayan, Advocate For the respondent : Shri S.N. Gohil, Supdt. (AR) CORAM:
Hon'ble Mr. Ramesh Nair, Member (Judicial) Hon'ble Mr. Raju, Member (Technical) Date of Hearing: 07.08.2018 Date of Decision: 14/08/2018 ORDER NO. A/11725/2018 Per: Raju This appeal has been filed by Vency Creation against demand of Customs duty, imposition of penalties, interest and denial of EPCG scheme to the appellant. The appeal is also against confiscation and imposition of redemption fine.
2. Ld. Counsel for the appellant argued that they had imported three embroidery machines purchased on high seas sale basis from M/s Rudrani Impex. The matter regarding imports by M/s Rudrani Impex was investigated by DGRI and as a result there was an enquiry against appellant. He pointed out that appellant had applied for the EPCG license on 16/08/2013 and had clearly mentioned in the said application the address of the supporting 2 C/11517/2015-DB manufacturer. He produced the rent deed dated 12.09.2013 in respect of said premises. He pointed out that the imports were made in September, 2013. He pointed out that the said premises was declared as supporting manufacture premises on the grounds that they had entered into an agreement for renting the premises to the appellant. However, subsequently, he refused to give premises and as a result they had to install the said machinery in a different premise. He pointed out that in December,2013, they were vested by Revenue officers who did not find the said machineries on the address declared in the license of the supporting manufacturer. But the machines were found in a different premise. He pointed that the machines were still owned by them and they were not sold or transferred to anybody else. He argued that in these circumstances, the violation is merely a technical violation. He pointed out that the said EPCG scheme requires submission of installation certificate within the period of six months. He argued that the Revenue had started action before completion of six months. He pointed that they had applied for amendment of address of the supporting manufacturer in their license to DGFT. However, the said application is still pending due to the said case booked by Revenue. He pointed out that the Revenue had booked the case in December, 2013. However, the machines were seized only in April 2013, i.e., after expiry of 6 months from the date of import. He argued that the intention of such delayed seizure was to invoke the provisions of notification which requires submission of installation certificate within the period of six months. He argued that the Revenue had visited the premise which was originally declared as supporting manufacturer premises and the land lord told them that no rent agreement was made with the appellant. He pointed out that no statement of the land lord was recorded and the rent agreement which is duly notarized was not shown to the land lord.
3 C/11517/2015-DB
3. Ld. AR argued that the appellant applied for IEC code on 24.07.2013 wherein the address of the supporting manufacturer was mentioned. He pointed that the rent agreement was entered in the month of September, 2013. On this basis he argued that the rent agreement is false and fabricated. He also relied on the condition no. 15, 16 & 17 of the License which read as follows:
"15. The capital goods are to be installed at the following address:
Name and Address of the Supporting Member Type Registration SL.No. Name Address of Unit No. Vency GR. Floor, 30,31,31 Jawahar 24-22-11- 1 SSI Creation Nagar, L.H. Road, Surat 395006 102066
16. In case of Merchant Exporters tied to supporting manufacturer(s), CGs are to be installed at the following address"
Name and Address of the Supporting Member Type Registration SL.No. Name Address of Unit No. Vency GR. Floor, 30,31,31 Jawahar 24-22-11- 1 SSI Creation Nagar, L.H. Road, Surat 395006 102066
17. The Authorisation holder shall submit Installation Certificate at the Regional Authority within 6 months from completion of imports against the subject Authorization."
3.1 He also relied on the condition 10 of the notification no. 22/2013 relating to EPCG scheme which reads as follows:
(10) that the capital goods imported, assembled or manufactured are installed in the importer's factory or premises and a certificate from the jurisdictional Deputy Commissioner of Central Excise or Assistant Commissioner of Central Excise, as the case may be, is produced confirming installation and use of the capital goods in the importer's factory or premises, within six months from the date of completion of imports or within such extended period as the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, may allow :
Provided that in case of import of spares, the installation certificate shall be produced within three years from the date of import : Provided further that if the importer, including an importer who is a Common Service Provider (CSP), is not registered with the Central Excise or if the importer is a service provider (other than a CSP), as
4 C/11517/2015-DB the case may be, he may produce the said certificate of installation and usage issued by an independent Chartered Engineer :
Provided also that in the case of manufacturer exporter and merchant exporter having supporting manufacturer(s) or vendor(s) or in the case of import of irrigation equipment for use in contract farming for export of agricultural products or in the case of importer rendering services, the capital goods may be installed at the factory or premises of such other person whose name and address is endorsed on the authorisation referred to in condition (1) and also on the shipping bills and where the bond for full difference of duty, if necessary, in terms of condition (6) with or without a bank guarantee, as the case may be, is executed by the importer and such other person binding themselves jointly and severally to fulfill the export obligation and all other conditions of this notification and to pay duty with interest at the rate of 15% per annum in case of default. This shall not apply to a CSP :
Provided also that agro units located in Agri Export Zones or service providers in Agri Export Zones may move the capital goods within the Agri Export Zones under intimation to the jurisdictional Deputy Commissioner of Central Excise or Assistant Commissioner of Central Excise, as the case may be, subject to the condition that the importer shall maintain accurate record of such movement;
4. We have gone through rival submissions. We find that an allegation has been made that the appellant had diverted the machines imported under EPCG scheme and not installed the same in the address declared in the license. The explanation of the appellant is that he had entered into an agreement with the land lord and on that basis he had applied for the license under EPCG scheme, however, when the machines were imported the land lord refused to give premise of land and as a result he had to install the machine at a different premise, nearby. In support of his claim regarding renting of the said premise, he had produced the rent agreement. Revenue has sought to disregard the rent agreement on the basis of what the land lord told the Revenue officials. However, no statements of the said land lord were recorded, nor the said land lord was confronted with the said rent agreement. In these circumstances, we are unable to uphold the charge that the appellant had not entered into the rent agreement for the said premises.
5. The perusal of the conditions prescribed in Para 15-17 (para 3 above) on the condition sheet of the EPCG License would show that
5 C/11517/2015-DB importer was required to install the said machines at the premise declared in the license and he was suppose to produce the certificate within 6 months from the completion of imports against the said license. The notification also prescribes a similar condition in clause 10 thereof. The appellant's explanation that he had time of six months to produce the installation certificate and that due to exigency of land lord not honoring his commitment to give the premises on rent, he had to install machines at a different premise. It has been claimed that he had six months time to produce the installation certificate and for this purpose, he had applied in DGFT for amendment in the license condition to incorporate the new address. We do not find any merit in the Revenue's allegations that the explanation given by the importer is false or incorrect. The appellant has claimed that the machine was not sold or disposed off or transferred by him to anybody else and, thus, there is no violation of that condition of the notification. It has been argued that the different address for installation is a curable defect for which they have already made an application to DGFT and which has yet not been not decided. 5.1 In the above factual matrix, we do not find that there has been any violation on the part of the importer, on account of which the duty could have been demanded or machines could have been confiscated. The appellants application for change of address is pending with DGFT and any action could have only be taken if DGFT rejects the said application. In view of above we do not find any merit in the impugned order. The same is set aside and the appeal is allowed.
(pronounced in the open Court on 14/08/2018)
(Raju) (Ramesh Nair)
Member (Technical) Member (Judicial)
DS