Decided on January 21,2015



R.K.SINGH - (1.)
(2.)THIS appeal has been filed against order -in -appeal dated 1 -8 -2005 which upheld the order -in -original dated 29 -11 -2011 in terms of which Customs duty demand of Rs. 6,07,127/ - along with interest was confirmed. The issue involved, briefly stated, is as under.
The appellants had imported capital goods under the EPCG licence claiming the benefit of Notification No. 110/95 -Cus. and were required to fulfill export obligation relating thereto as per the condition of the said exemption notification. The appellants were required to produce within 30 days of the expiry of each year from the date of issue of licence from 2nd year onward evidence showing the extent of export obligation fulfilled and where export obligation of any particular year was not fulfilled, they were required to pay within three months from the expiry of the said year and an amount equal to that portion of the duty leviable on the goods but for the said exemption, which bears the same proportion as the unfulfilled portion of the export obligation bears to the export obligation with interest @ of 24% per annum from the date of clearance of the goods. The appellants submitted export obligation/discharge certificate but on perusal of the related shipping bills, it was found that the goods exported thereunder were not manufactured in the factory where the capital goods imported under EPCG were installed, they were exported from their other factory and thus it was in violation of the provisions of para 4.1 of the EXIM 1992 -97 policy. Accordingly, the impugned demand was confirmed.

In the appeal papers, the appellants have contended that they have already submitted the export obligation discharge certificate and therefore the demand should not have been raised. They cited the judgment in the case of Penner Industries Ltd. v. CCE, Hyderabad - : 2005 (186) E.L.T. 125 in their favour and also the judgment of Ashok Enterprises v. CC, Chennai - : 2005 (186) E.L.T. 497 in their favour.

(3.)NO one appeared for personal hearing for appellant and there was no request for adjournment. Accordingly, and having regard to the order of the Supreme Court in the case of Balaji Steel Re -Rolling Mills v. CCE - : 2014 (310) E.L.T. 209 (S.C.) : 2014 (36) S.T.R. 1201 (S.C.), to the effect that the CESTAT should not dismiss appeal for absence of appellant and ought to decide appeal on merit even if the appellant or its Counsel was not present, we proceed to decide the appeal on merit. We find that in terms of para 4.1 of the EXIM policy 1992 -1997 "export obligation shall be fulfilled by the export of goods manufactured or produced by the use of capital goods imported under the EPCG Scheme" and in their obligation made to the DGFT for issuance of the EPCG licence, the appellants have declared that they would be exporting goods produced out of the capital goods imported under the EPCG Scheme. There is clear evidence that the goods exported and counted towards fulfillment of export obligation were not manufactured in the factory where the capital goods imported under EPCG Scheme were installed. It is seen from the exemption notification 110/95 -Cus. that "export obligation" in relation to importers other than those rendering services, means export to a place outside India of products manufactured with the use of capital goods imported, assembled or manufactured in terms of this notification. Thus it is evident that the condition of the exemption notification has been clearly violated rendering the appellant ineligible for the benefit of the said notification and as a consequence they become liable to pay differential duty. Incidentally CBEC vide its Circular No. , dated 20 -12 -1995 has also inter alia stated that "under the EPCG Scheme, a statement of exports signed by the exporter and certified by the Chartered Accountant supported by export promotion copies of shipping bills with respective bill of lading could be accepted as evidence of discharge of export obligation. The statement should also include a declaration from the exporters confirming that goods exported were manufactured using the capital goods imported under the EPCG Scheme against the particular licence." In the light of the foregoing, we find no infirmity in the impugned order and the appeal is therefore dismissed.

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