TAMARAI MILLS LTD. Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) The appellants had imported textile machinery under EPCG Licence No. 2131404 dated 19.11.1993 issued by Director -General of Foreign Trade, New Delhi and had cleared the same at Customs in the year 1994, without payment of duty, by availing exemption under Notification No. 160/92 -Cus dated 20.4.1992. The CIF value of the capital goods originally shown in the EPCG licence was Rs. 4,74,33,760, which was subsequently amended as Rs. 4,70,26,809 at the instance of the importer. Under the above scheme, the importer was liable to discharge export obligation to the extent of four times the CIF value of the imported capital goods. The Customs authorities, upon finding that the importer had not fulfilled export obligation to the extent of US 88,52,838,.05, issued a show -cause notice to them alleging non -fulfilment of the conditions of the EPCG licence and the Customs Notification and proposing to demand duty on the capital goods. The notice also proposed to confiscate the goods under Section 111(o) of the Customs Act as also to impose penalty on the importer under Section 112(a) of the Act. The proposals were contested. In adjudication of the dispute, the Commissioner of Customs confirmed the demand of duty against the party under Section 28 of the Act, confiscated the goods under Section 111(o) with a fine of Rs. 30 lakhs for redemption of the goods in lieu of confiscation, and imposed a penalty of Rs. 20 lakhs on the party under Section 112(o). Hence the present appeal.

(2.) It appears from the records that the appellants had challenged the Commissioner's order in a Writ Petition before the Hon'ble Madras High Court and that the Writ Petition was subsequently dismissed as withdrawn.

(3.) Heard both sides. Ld. Counsel for the appellants submitted that they had fulfilled their export obligation under the EPCG licence and that the licensing authority had acknowledged this fact in letter No. 20/1344/93/PECG:IV/1169 dated 25.8.2004. Ld. Counsel placed on record a copy of the said letter issued by DGFT, New Delhi. Ld. Counsel further submitted that, where the licensing authority itself certified fulfilment of export obligation, it was not open to the Customs authorities to indulge in investigation as to whether export obligation had been fulfilled or not. In this connection reliance was placed on the Tribunal's decision in Hy -Grade Pellets Ltd. v. Commissioner of Customs, Visakhapatnam, 2004 (171) ELT 177 (Tri. Del.). We have heard the Ld. SDK also.