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TMI Blog2024 (12) TMI 966X X X X Extracts X X X X X X X X Extracts X X X X ..... y under section 28 of the Customs Act, 1962 [Customs Act] along with interest under section 28AB of Customs Act, imposed redemption fines and penalties on the manufacturers, and imposed personal penalties under section 114AA of Customs Act on the individuals. With respect to this appellant, by the impugned order, the Commissioner: a) Denied the benefit of EPCG authorisation issued by the Director General of Foreign Trade [DGFT] and ordered recovery of customs duty of Rs. 7,81,152 under section 28 of the Customs Act; b) Ordered recovery of interest under section 28AB of the Customs Act; c) confiscated the imported goods and imposed a redemption fine of Rs. 17,92,000/- under section 125 of Customs Act; and d) imposed penalty of Rs. 7,81,152/- under section 114A of the Customs Act. 3. Aggrieved, appeals were filed by the manufacturers including this appellant and the individuals. When the appeals were heard in 2017, the jurisdiction of the Commissioner of Customs (Preventive) Jodhpur who had issued the SCN was in dispute. This Tribunal remanded all matters to the Commissioner with a direction to decide after final decision by the Supreme Court on the question o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion) 1992 [FTDR Act] and the Foreign Trade Policy (2009-2014) [FTP] framed under it. EPCG is a scheme under which DGFT issues a licence which entitles one to import capital goods at NIL or concessional rate of duty and using the capital goods so imported, goods must be manufactured and exported of a certain value. 9. The appellant imported capital goods at concessional rate of duty of 3% using the EPCG licence after executing the necessary bond. Thereafter, it exported goods manufactured using the capital goods and exported them as required under the licence. Taking into account its exports made, the DGFT issued an Export Obligation Discharge Certificate [EODC]. 10. Thereafter, receiving intelligence that 20 manufacturers including the appellant had mis-declared the description/make of the imported capital goods in order to avail benefit under the Technology Upgradation Fund [TUF] (scheme) of the Ministry of Textiles, officers of the Commissioner of Customs initiated investigation. They examined the imported capital goods which were already installed in the appellant's factory with the help of experts and found that the actual year of their manufacture was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the department is built on the premise that the appellant had mis-declared the year of manufacture of the capital goods so as to avail undue benefit under the TUF Scheme of the Ministry of Textiles. 14. The first question which, therefore, arises is whether the appellant had mis-declared the year of manufacture of the capital goods. 15. We find that the Bill of Entry (which is the declaration of the appellant made under the Customs Act) nowhere indicates any year of manufacture. Thus, there was no mis-declaration before the Customs. 16. The appellant sought and availed the benefit of the EPCG licence issued by the DGFT which also does not specify any year of manufacture. In other words, the appellant was free to import goods of any year of manufacture using the licence. 17. The appellant had applied to the DGFT for the EPCG licence in Ayat Niryat Form-4 [ANF-4]. Even in this application, the appellant had not declared any year of manufacture of the goods. Along with the application, the appellant had submitted a proforma invoice of the overseas supplier of the goods which does indicate the year of manufacture as 2000. Against S.No. 11B of the ANF-4, to the question as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se the powers and discharge the duties conferred or imposed on him under this Act. (2) An officer of customs may exercise the powers and discharge the duties conferred or imposed under this Act on any other officer of customs who is subordinate to him. (3) Notwithstanding anything contained in this section, a Commissioner (Appeals) shall not exercise the powers and discharge the duties conferred or imposed on an officer of customs other than those specified in Chapter XV and section 108." 26. The Commissioner can exercise only such powers as are conferred on him under the Customs Act. While import of goods and duties and restrictions on them are under the Customs Act, the EPCG licences are issued by the DGFT under FTDR Act and the Foreign Trade Policy [FTP] framed under it by the Government. Neither the FTDR Act not the FTP confers any persons as the Commissioner of Customs. On the other hand, para 2.3 of the FTP (2009-2014) specifically states that the decision of the DGFT shall be final and binding on all matters relating to its interpretation. It reads of follows: INTERPRETATION OF POLICY "2.3. If any question or doubt arises in respect of interpretation of any prov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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;" 32. Section 111(m) applies if the goods do not correspond to the entry made under the Act, i.e., the Bill of Entry. As we found that the Bill of Entry does not mention any year of manufacture at all, the imported goods do not have to be of any year of manufacture. Clearly, 111(m) does not apply to this case. 33. Section 111(o) applies if the goods are exempted subject to some conditions and such conditions were not fulfilled and the non-fulfilment of such conditions was not sanctioned by the proper officer. In this case, the capital goods imported under EPCG were exempted subject to the condition that the goods manufactured using them will be exported and the export obligation was met and the DGFT issued an EODC to the appellant. Therefore, section 111(o) also does not apply to this case. 34. The last question is if the penalty imposed under section 114A can be sustained. 35. This section reads as follows: "114A. Penalty for short-levy or non-levy of duty in certain cases.-Where the duty has not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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