TMI Blog2016 (12) TMI 138X X X X Extracts X X X X X X X X Extracts X X X X ..... eparate 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and after clearance. 3. The vehicles were seized on 20 th September 2012 but released provisionally under section 110 of Customs Act, 1962. In the impugned order, the adjudicating authority has proceeded with action under Customs Act, 1962 for failure to comply with the conditions pertaining to furnishing of installation certificate within six months of import and for failure to evidence the fulfillment of export obligation. It is the finding of the adjudicating authority that the cars had been imported under authorization that required foreign exchange to be earned through 'car rentals transport for foreign tourists' but had not been utilised for the said purpose and, instead, was found parked at the residence of the Directors of the appellant-company for personal use. The impugned order arrived at this conclusion based on the absence of any records of earning foreign exchange from the prescribed activity and from the statements of various persons in the employment of the appellants. The appellant-company, during the pendency of investigations, had, in accordance with the requirements of the scheme in the Foreign Trade Policy and Handbook of Procedures, applied to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... el but was transferred from Thiruvananthapuram in Kerala to Benguluru in Karnataka; it was taken up for investigation after being issued with Export Obligation Discharge Certificate (EODC) by the licencing authority. The primary issues addressed were the nexus required between the imported capital goods and the source of foreign exchange earnings claimed for the discharge, the scope and limits of action that could be initiated by Customs authorities when discharge of export obligation had been certified by the licencing authority and the extent of compliance with the condition of installation that should suffice, The contrary opinions on these very issues in the separate decisions of the constituents of the Bench required the matter be to be referred to Third Member. Consequent upon such reference, the majority opinion held that the there was no bar on action being initiated under the Customs Act, 1962 provided that the instructions of the Central Board of Excise Customs to refer the matter to the licencing authority was also complied with. The Third Member opined that awaiting for the outcome of such referral could jeopardize recovery if the limitation period in section 28 of Cu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spondence with the licensing authority for issue of Export Obligation Discharge Certificate, the adjudicating authority was privy to the clarifications sought by licencing authority who was yet to take a decision in the matter. 8. In addition to the circumstances discussed supra , we consider it appropriate to call to mind some aspects and peculiarities of the Export Promotion Capital Goods (EPCG) scheme in so far as it applies to the appellant. The importer is permitted to clear capital goods at concessional rate in return for fulfilling export obligation of eight times the duty foregone within a period of eight years from date of issue of authorization to import. Import of motor cars are permitted only to hotels, travel agents, tour operators or tour transport operators and companies owing/operating golf resorts whose total foreign exchange earning in current and preceding three licencing years is ₹ 1.5 crores, with duty foregone in authorizations in a licencing year limited to half of the average foreign exchange earnings in the preceding three licencing years and subject to vehicle being registered as tourist vehicle. The corresponding notification no. 97/2004-Cus d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lled. Failure to tailor an element of the notification to adjust to altered circumstances cannot be held to the detriment of a holder of valid licence issued by a competent statutory authority. As held by the Tribunal in re -Ifs Goldfinch Ltd and re M/s Hotel Excelsior Ltd. the ingredients of alienation of or failure to register the vehicle under the Motor Vehicles, 1988 are lacking in the notice alleging non-compliance with the condition of production of installation certificate. We do not find the impugned order to be unreasonable in holding that condition of installation has been breached by appellant. 11. We are not in doubt that the facts unearthed by the investigators do evidence use of the imported cars for personal use and for purposes other than earning of foreign exchange but that, to the extent that such use is not violation of the conditions of import in the scheme or in the corresponding exemption notification, does not suffice to conclude that the vehicles were not used for the purposes for which import at concessional rate of duty was permitted by the authorization. 12. Appellant-company has applied to the licencing authority for issue of Export Obligatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1962 and the jurisdiction to ascertain fulfillment of export obligation but exclusively relate to conditions that require export of goods. Both the privileged imports and the obligated exports in those disputes were, indubitably, handled through customs ports and in accordance with the procedure laid down in Customs Act, 1962. Domain knowledge of the manner and mode of achievement of export obligation vests in the customs formations; verification for ascertainment before certification must necessarily be referred to customs ports and none other. The statutory authority to assess the nature and value of export goods carries with it the inherent authority to decide upon acknowledgement of a particular export or set of goods as acceptable. However, in the matter of services as a source of foreign exchange an entirely different tale unfolds. There can be no two opinions that customs statutes are enacted for, and deal exclusively with, import or export of goods. Services have no place therein and there is no enabling authority to levy duties on import or export of services. Hence, neither domain knowledge nor domain expertise vests in the customs authorities to be enable of or empowered ..... X X X X Extracts X X X X X X X X Extracts X X X X
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