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2021 (7) TMI 685 - AT - CustomsMisuse of EPCG licence scheme - use of false and incorrect documents for export of garments as third party exporter - Whether the allegation that the appellants have not fulfilled export obligation is sustainable or not? - HELD THAT:- On perusal of EPCG licence it is seen that it is issued in 2015 by DGFT and the period for completion of the export obligation is six years. Show cause notice has been issued on 18.11.2020. The contention of the appellant that SCN alleging non-fulfilment of export obligation is premature is therefore not without merits. From the conditions of the EPCG licence, it is also seen that licence holder may discharge the export obligation by way of direct exports as well as through third party exports. In the event of third party exports, name of the third party exporter, name of the EPCG licence holder, licence number and date should be noted on the shipping bill. Thus, it cannot be said that merely by exporting the goods through third party exporter/Rithvikk Garments, the licence holder (Sri Angallamman Knit Fabrics) has violated the conditions of the EPCG licence. Over and above all the facts, it has to be noted that since there is enough time for completion of export obligation and also for submitting necessary documents before the DGFT, the show cause notices issued by the department alleging various violations, in my view, cannot sustain. There is no evidence to show that appellant M/s.Rithwikk Garments had intentionally made any false endorsements on the shipping bill. Had there been any dishonest intention, the appellants would not have produced such invoice showing lesser amount before the Customs officers. From the statements of both the appellants, it is clear that it is the first time they have endorsed shipping bills with this EPCG licence. Confiscation of the export goods cannot sustain and it is hereby set aside - penalty imposed on both the appellants is unwarranted - Appeal allowed - decided in favor of appellant.
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