Delay in EODC issuance by DGFT: CESTAT deletes Penalty on Importer [Read Order]

The Delhi bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) observing the Delay in Export Obligation Discharge Certificate (EODC) issuance by the Directorate General of Foreign Trade (DGFT), deleted the Penalty imported on exporter.

The issue to be decided was whether the appellant is required to fulfill the export obligation within the time prescribed under the notification or the same is subject to the EODC Certificate issued by the DGFT.

The appellant, who exported goods from JNPT, Nava Sheva, promptly submitted export details to the DGFT on 01.10.2011, within the eight-year window for an Export Obligation Discharge Certificate (EODC). The document, crucial to the case, was submitted alongside written responses on 08.06.2023. Despite this, the Customs Department issued a show cause notice on 04.06.2014, allegedly overlooked by the appellant. The Adjudicating Authority hastily confirmed the notice, citing missing documents. The subsequent call for dues payment, dated 25.05.2015, and a lack of response fueled an ongoing legal battle. The appellant, challenging the Order-in-original, claimed non-receipt of crucial notices, emphasizing EODC receipt on 26.05.2015. The case then rested with the Commissioner of Customs (Appeals).

The appellant's counsel Mukteshwar Nath Dubey asserted that the export obligation timeframe, expiring on 10.01.2013, was met with due diligence. The submission of Form ANF5B to the DGFT on 01.10.2011, as evidence of compliance, was highlighted, challenging any allegations of delay. Emphasizing the violation of natural justice, the appellant argued that the elusive show cause notice was never served, an issue overlooked by the Commissioner (Appeals). Citing legal precedents, the defense built a case on adherence to notification conditions.

The Counsel for the Respondent Rakesh Kumar presented a strong case, deeming it straightforward. They argued that the appellant failed to timely submit the Export Obligation Discharge Certificate (EODC), a crucial document in the dispute. According to the representative, the EODC issued by the DGFT exceeded the stipulated period, leading to non-fulfillment of conditions necessary to claim the notification benefits. Citing a series of legal decisions, the representative emphasized the strict interpretation of notification conditions, asserting that any ambiguity should favor the State. As the legal battle intensified, the Revenue remained resolute in holding the appellant accountable for customs duties.

The two member bench of the tribunal comprising Binu Tamta Member (Judicial) and Hemambika R. Priya Member (Technical) concluded that the appellant demonstrated compliance with export obligations, submitting requisite documents to the Directorate General of Foreign Trade (DGFT) for the Export Obligation Discharge Certificate (EODC).

 Notably, any delay in EODC issuance squarely rested with DGFT, absolving the appellant from penalization. The Commissioner (Appeals) was criticized for not considering this crucial aspect in alignment with established legal principles.

Consequently, the impugned order was set aside, granting the appellant a favorable outcome with consequential relief.

To Read the full text of the Order CLICK HERE

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