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2016 (12) TMI 138 - AT - CustomsImport of two Bentley cars under EPCG scheme - Use of case for the purpose other than to earn foreign exchange - Jurisdiction - cars found parked at the residence of the Directors of the appellant-company for personal use. - Held that: - The scheme is limited to import of capital goods and, consequently, does not impose any condition of exclusive use for the purpose assigned in the import authorization - whether the holder be a manufacturer of goods or supplier of services. Such condition is not envisaged because it is not in public interest that capital goods utilized sub-optimally for solely for earning foreign exchange. Therefore, usage for purposes other than earning of foreign exchange is not a breach of the conditions of the scheme or of the corresponding exemption notification. While the 'proper officer' under the Customs Act, 1962 can initiate action for breach of conditions of notification, a certification of compliance with conditions of licence cannot be ignored or substituted by separate findings to the contrary. The adjudicating authority, in rendering the finding that export obligation has not been fulfilled, has erred in pre-empting a decision by the statutory authority vested with that responsibility. The exemption notification itself in paragraph 2(2) allows a period of six year from date of licence, i.e. upto August 2013, as the first reporting block, to fulfill the export obligation; and we notice that seizure was effected and importers directed to justify the imports well before that deadline. The service which the appellant was to render is not a readily identifiable taxable service in Finance Act, 1994. The authorization issued to appellant specifies the ITC HS classification of the service through which export obligation is to be achieved and this classification is alien to the Customs Tariff Act, 1975 and has naught to do with section 65 of Finance Act, 1994. The description and assigning of value to services earning foreign exchange are not amenable to interpretation or assessment by customs authorities. Consequently, no authority attaches to claim the right or duty to determine the extent of achievement of export obligation. In the light of this factual matrix, the determination of export obligation is best left to the licencing authority. The finding that export obligation has not been achieved is, thus, without authority of law. There is no allegation of breach of any other condition in the exemption notification - the demand of duty and confiscation of the cars fails as do the various penalties - appeal allowed - decided in favor of appellant-importer.
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