The Hyderabad Bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) quashed the order against IND Synergy as the licensing authority and Policy Relaxation Committee modified the conditions to two years to fulfil the Export obligation.
M/s IND Synergy Ltd, the appellant challenged the order-in-originaldated 31.07.2020 passed by the Principal Commissioner of Customs Visakhapatnam.
The appellants were issued a license dated 28.08.2007 under the export promotion of capital goods(EPCG scheme) by the Director General of Foreign Trade, Mumbai. As per thescheme, read with Customs Notification No. 97/2004-Cus dated 17/09/2004, capital goods imported under thelicense are exempted from payment of duty over 5% subject to certain conditions including the condition thatthe appellant has to fulfil the export obligation equivalent to 8 times the duty suffered on capital goods on FOB basis within a period of 8 years from the date of issue of license and the appellant had to obtain export obligation discharge certificate (EODC) from the DGFT and produce before the Customs Officers.
The appellant executeda bond at the time of importto the effect that it would observe all the terms and conditions of the said notification and license and inthe event of failure to fulfil either infull or partthe export obligation, it would pay the customs duty but for the exemption notification along with interest. The appellant failed to fulfil the complete export obligation within time.
A show-cause notice dated 19/10/2016 was issued by the Commissioner to the appellant proposing to deny the benefit of the exemption notification due tothe aforesaid failure and demandduty under Section 28(1) of the Customs Act 1962 along with interest under Section 28 AA read with conditions of bond executed by the appellant for non-compliance of the conditions stipulated therein.
Further proposed to confiscate the goods which were imported under Section 111(o) for failure to fulfil the conditions subject towhich the goods were exempted under the Notification andto impose a penalty on the appellant under Section 112.
The appellant contended that they had applied to the DGFT and further to the Ministry of Commerce seeking an extension of time to fulfil the export obligation which was allowed by the licensing g authority and the “Policy Relaxation Committee”.
A Coram of Mr Anil Choudhary, member(judicial) Mr P V Subba Rao member (technical) set aside the impugned order as the licensing authority and the Policy Relaxation Committee have modified the conditions of the license and allowed two years further time to the appellant to fulfil theexport obligation. Mr R.k Tomar, Adv appeared for the appellant and Mr P. Amaresh, Authorized Representative appeared for the Revenue.
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