9911796707
TMI Blog2022 (6) TMI 558X X X X Extracts X X X X X X X X Extracts X X X X ..... de bill of entry no. 432245/13.04.1994 in the manufacture of 'theophyline' but could account only for 1370 kgs and 1950 kgs respectively in the export of 1500 kgs. 2. On conclusion of proceedings initiated against them for noncompliance with the condition in the relevant exemption notification, reflecting the obligations arising from the advance licence and the relevant provisions of the Foreign Trade Policy, duty foregone of Rs. 5,02,770 was ordered to be recovered, along with interest thereon, and penalty of Rs. 1,00,000 imposed under section 112 of Customs Act, 1962 attendant upon goods being held as liable for confiscation under section 111 of Customs Act, 1962 for breach of conditions of import. The appellant, having conceded the liability of duty, challenged the charging of interest and imposition of penalty which was rejected by the first appellate authority. The matter, thus, came before the Tribunal on an earlier occasion leading to remand, vide final order no. A/86137-86138/17/SMB dated 4th November 2016, to the original authority for considering the contention of the appellant that section 28AB, empowering the chargeability of interest on duty recovered subsequently, wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r argued by Learned Consultant that reference to 'interest' in paragraph 128 of Handbook of Procedures of Foreign Trade Policy 1992-97, which appeared to impress itself on the original authority, was applicable only to 'quantity based licences' and not to 'value based licences' such as theirs for which attention was drawn to the absence of such both in the licence issued to them and in notification no. 159/90-Cus dated 30th March 1990 referred in the licence. It is also submitted by Learned Consultant that, in the proceedings culminating in order for recovery of Rs. 43,873 for non-utilization of 'sodium cyanide', imported vide bill of entry no. 6545/17.11.1993 in accordance with notification no. 64/79-Cus dated 7th March 1979, in the manufacture of specified goods, the rejection of these very pleas by the first appellate authority is pending before the Tribunal. 5. Learned Authorized Representative argued that the plea of having been issued with 'non-qualified' licence in the averment of Learned Consultant was not acceptable in the light of there being only two alternatives available under the scheme and the regularization upon non-compliance with condition, provided for in paragr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... primacy to the notification issued under Section 25 of Customs Act, 1962 over the scheme in the EXIM Policy has been clearly explained thus : '10. The departmental representative points to the provisions of paragraph 45 of the Policy, and paragraph 103 of the Handbook of Procedures referring to the legal undertaking required to be furnished by the importer and applying for a EPGC licence. This undertaking provides a clause that the importer shall pay full amount of Customs duty saved, and 24% interest thereon, for the total CIF value of imported goods from the date of import, in the event that the capital goods are not used for the purpose for which they were imported. 11. There is clearly a conflict between what is contained in the undertaking and what is contained in the notification. The undertaking provides for recovery of proportionate duty, that is the duty other than the "full amount of Customs duty saved". The meaning of the words occurring in the undertaking will only be that the duty is payable in case the export obligations is not completed has to be in proportion to the extent of shortfall in that export obligation. The notification, however, is clear that it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the export obligation had to be fulfilled within a period of five years i.e., by November, 1998. Therefore, the liability to pay the differential duty arose in 1998, when the period for fulfilling the export obligation expired and the obligation was not fulfilled. Sections 28AA and 28AB came into the statute book in 1996 itself and, therefore, in the light of the decision of this Tribunal in the case of Parasrampuria Synthetics Ltd. (cited supra) the provision for charging interest was in the statute book. Secondly, interest has been demanded not under the provisions of the above Sections, but in terms of the bond and LUT executed by the appellant before the Customs and the licensing authorities and in terms of the Policy provision governing EPCG scheme. At the relevant time, Export Promotion Capital Goods Scheme was governed by Chapter VI of the Export Import Policy 1992-97. The capital goods in the instant case have been imported under the said provision. Vide Para 45 of the Exim Policy 1992-97, the importer was required to execute with the licensing authority a legal undertaking supported by a bank guarantee wherever necessary for the fulfilment of the export obligation as p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s are two totally different aspects under the Customs law. Demand of duty arises on importation of the goods and if goods have been imported at a concessional rate of duty subject to fulfilment of certain conditions and such conditions are violated, then the duty concession would not be available at all. In the case under consideration, the demand of duty has arisen under the notification itself in terms of the bond executed by the importer at the time of importation of the goods. Confiscation of the goods arise under Section 111 of the Customs Act in certain specified situations. Section 111(o) reads as follows : "Any goods exempted, subject to any condition, from duty or any prohibition in respect of the import thereof under this Act or any other law for the time being in force, in respect of which the condition is not observed unless the non-observance of the condition was sanctioned by the proper officer." In such an eventuality, the goods imported shall be liable to confiscation. In the instant case the goods were imported availing a concessional rate of duty on the condition that the goods will be put to use for manufacture and export of certain products up to certain val ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ating authority has the power to allow the redemption of the goods on payment of fine in lieu of confiscation under Section 125 of the Customs Act. The goods were released to the appellants at the time of importation under a bond executed by the appellant. The release of the goods was thus provisional. Therefore, when the assessment is finalized subsequently, even if the goods are not available for confiscation, redemption fine in lieu of confiscation can be imposed as has been held in a number of judicial pronouncements on the subject. Therefore the imposition of redemption fine in the instant case is fully justified and is quite legal and we hold accordingly.' 6. It is clear from the decisions cited on behalf of appellant and respondent that interest liability on duty recovered subsequently may be under the authority of Customs Act, 1962, the relevant notification issued under section 25 of Customs Act, 1962 for implementing exemption or concession scheme in Foreign Trade Policy or by reference to such authorizing provision of the Foreign Trade Policy in the said notification; the essence is an authority, direct or remote, attributable to an empowering statute. 7. There can be ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
