Non-Fulfilment of Export Obligation Not an Irregularity when Amnesty Scheme Silent on Penalty: CESTAT [Read Order]
since the amnesty plan as a whole makes no mention of penalties, it is possible that any infraction pertaining to the failure to fulfill an export obligation is not considered irregular
![Non-Fulfilment of Export Obligation Not an Irregularity when Amnesty Scheme Silent on Penalty: CESTAT [Read Order]](https://www.taxscan.in/wp-content/uploads/2025/03/CESTAT-New-Delhi-Penalty-Non-Fulfilment-of-Export-Obligation-taxscan.jpg "Non-Fulfilment of Export Obligation Not an Irregularity when Amnesty Scheme Silent on Penalty: CESTAT [Read Order]")
The New Delhi bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) has ruled that failure to fulfill export obligations under an Export Promotion Capital Goods ( EPCG ) license cannot be regarded as an irregularity if the amnesty plan does not call for payment of any penalties. Read More: ITAT dismisses Tax Appeal as assessee Applies for Vivad Se Vishwas...
The New Delhi bench of the Customs, Excise and Service Tax Appellate Tribunal ( CESTAT ) has ruled that failure to fulfill export obligations under an Export Promotion Capital Goods ( EPCG ) license cannot be regarded as an irregularity if the amnesty plan does not call for payment of any penalties.
Read More: ITAT dismisses Tax Appeal as assessee Applies for Vivad Se Vishwas Scheme
New Poly Tech Engineers , the Appellant / assessee imported Coordinate Measuring machine without payment of import duty under EPCG license. Due to failure to meet the export obligation, a Show- Cause Notice was issued demanding recovery of duty with interest, redemption fine, confiscation of imported capital goods and imposing penalty. Consequently, an adjudication order was passed confirming the duty demand, etc. The same was also affirmed by the Commissioner Appeals. Hence, an appeal was filed before the tribunal.
How Does the Supreme Court Shape Tax Laws? Discover Landmark Rulings! - Click Here
The appellant / assessee availed the benefit of the amnesty scheme launched on 01.04.2023 and therefore limited its grounds only to the imposition of penalty and redemption fine and its enforcement. The appellant / assessee argued that once closure letter is filed before the Authority in pending appeals as per the scheme, they will decide on such closure. It was further argued that the scheme does not contemplate payment of any redemption fine or penalty.
The revenue, on the other hand, contended that appeal filed before the first appellate authority is only covered under the Amnesty scheme and the same would not apply to tribunals.
Examining clause (ix) of the Amnesty program, the bench noted that the language of the scheme was intended to include appeals that were still pending before the tribunals. The bench relied on the ruling in M/S Makwuds India Pvt. Ltd. vs. The Commissioner of Customs, Chennai-IV, wherein it was noted that since the amnesty plan as a whole makes no mention of penalties, it is possible that any infraction pertaining to the failure to fulfill an export obligation is not considered irregular.
Step by step guide of preparing company Balance sheet and profit & loss account Click Here
Read More: ITAT dismisses Tax Appeal as assessee Applies for Vivad Se Vishwas Scheme
The court, led by judicial member Dr. Suvendu Kumar Pati, set aside the contested judgment after noting that the amnesty plan would also apply to appeals that were still ongoing before tribunals. Therefore, it was decided that the Commissioner's order (appeals) is overturned because the Act or omission has been regularized through the Amnesty plan. Consequently, the appeal was granted.
To Read the full text of the Order CLICK HERE
Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
