TMI BlogSettlement of cases involving default in export obligation under Advance Licence/EPCG Schemes by Settlement CommissionX X X X Extracts X X X X X X X X Extracts X X X X ..... liability in cases involving default in export obligation under Advance Licence/EPCG Schemes, where Settlement Commission had finally settled the liability by granting waiver of interest on duty. In Para 2 of the said Circular, customs field formations were advised to take appropriate action to safeguard Government revenue in such cases. 2. After receipt of DOR Circular, DGFT authorities have examined this issue at their end and informed DOR that in all EPCG/Advance Licences issued prior to 1-4-1995 (where LUT/BG was submitted to relevant DGFT authorities), in terms of Section 11 of Foreign Trade (Development and Regulation) Act, and in terms of one of the conditions of Advance/EPCG Licence, the liability to pay interest on duty does not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Indemnity-cum-Guarantee Bond -cum-Legal Undertaking has been imposed on the EPCG licence in terms of powers given under Foreign Trade (Development and Regulation) Act as per following provisions : - The Foreign Trade (Development and Regulation) Rule provides under Section 6(2)(b) as under :- 6(2)(b) : The licensing authority may issue a licence for import subject to condition that the applicant for a licence shall execute a bond for complying with the terms and conditions of the licence. 2. The requisite Indemnity-cum-Guarantee Bond-cum-Legal Undertaking has been prescribed in the Handbook of Procedures. The EXIM Policy and Procedures are duly notified under Section 5 of the Foreign Trade (D R) Act, in Gazette of India, Extraor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f interest on the amount of customs duties saved from the date of import of the first consignment till the date of payment. 7. The Foreign Trade (Development and Regulation) Act, 1992 provides under Section 19(2)(a), (d) and (j) as under :- 19(2) : Power to make rulesin particular, and without prejudice to the generality of the foregoing power, such rules may provide for all or any of the following matters, namely : - (a) the manner in which and the conditions subject to which a special licence may be issued under sub-section (2) of Section 8; (d) the form in which and the terms, conditions and restrictions subject to which licence may be granted under sub-section (3) of Section 9; (j) any other matter which is to be, or may be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 160/92. In some cases the Settlement Commissioner of Customs has passed orders in such cases to the Customs authority not to charge interest in respect of EPCG licences where licensee has not fulfilled the stipulated export obligation. 12. In respect of EPCG licences pertaining up to the period 31-3-1995 the Indemnity-cum-Guarantee Bond-cum Legal Undertaking has been executed with DGFT at H. Qrs. The EO monitoring in such cases is being done by us. The Customs authority are also writing to us for EO monitoring. We are issuing Demand Notice for payment of duty saved amount on unfulfilled portion of Export Obligation together with interest as provided in the Legal Undertaking executed by the EPCG licensee with us. Wherever EPCG licensee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ms Act. Customs authority has no jurisdiction whatsoever to pass any orders under FT (D R) Act. In case any order has been passed by customs authority under FT (D R) Act, the same has no binding on DGFT as it will be without any authority. 15. In an another case of M/s. Maypar Leather Manufacturing Co. Ltd., Chennai , the Settlement Commission, Chennai in the Settlement application No. SA(C) No. 23/2001, dated 2-8-2001 relating to EPCG licence No. P/CG/2101315, dated 24-12-1992, in their order No. 9/2002-Cus., dated 27-9-2002 has stated that they have no powers to interfere with any action taken by DGFT under the FT (D R) Act. 16. Furthermore the Department of Revenue has recently issued a Circular No. 53/2002, dated 20-8-2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It may also be mentioned that not abiding to the clause of the Indemnity-cum Surety bond and LUT dated 4-1-1993 may become a good cause for initiation of penal action under provisions of Section 11(2) of the FT (D R) Act, 1992 and that they shall pay interest. 20. An action under FT (D R) Act is independent of any other action under Customs Act. Customs authority has no jurisdiction whatsoever to pass any orders under FT (D R) Act. In case any order has been passed by customs authority under FT (D R) Act, the same has no binding on DGFT as it will be without any authority. Annexure-II IN THE HIGH COURT OF JUDICATURE AT MADRAS (Special Original Jurisdiction) Friday, the Twenty Fifth day of October Two Thousand Two ..... X X X X Extracts X X X X X X X X Extracts X X X X
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