Commissioner of Customs (Port) Vs Patna Offset Press (CESTAT Kolkata)
Introduction: Explore the recent CESTAT Kolkata order in the case of Commissioner of Customs (Port) vs. Patna Offset Press. The appeal revolves around the non-imposition of redemption fine and penalty despite the respondent’s failure to fulfill export obligations as per Customs Notification. Delve into the details of the case, the Handbook of Procedures, and the key arguments presented by both parties.
Detailed Analysis: The Commissioner of Customs (Port) filed an appeal against the order where no redemption fine and penalty were imposed on Patna Offset Press. The respondent held a Zero Duty EPCG Authorization, and the dispute arose due to their failure to fulfill export obligations within the specified block periods. The respondent, unaware of the specific condition, paid duty and interest promptly upon investigation.
The Customs Notification (No.102/2009-Cus) outlines the conditions, including the obligation to fulfill export targets within specified blocks. The Handbook of Procedures for Foreign Trade Policy provides guidelines for such cases. The respondent, thinking they had six years to meet obligations, paid duty and interest only after four years. The adjudicating authority refrained from imposing redemption fine and penalty, considering the respondent’s immediate compliance upon being informed.
The revenue argued that violation of Notification conditions warrants redemption fine and penalty. In response, the consultant for the respondent highlighted the confusion arising from the interpretation of the export obligation period. The respondent, acting promptly upon realizing the obligation, paid duty and interest, indicating compliance.
Conclusion: CESTAT Kolkata upheld the non-imposition of redemption fine and penalty, emphasizing the respondent’s quick response to fulfill obligations upon awareness. The confusion regarding the export obligation period played a crucial role, and the immediate payment of duty and interest demonstrated the respondent’s commitment to compliance. This case underlines the significance of clarity in trade policies and acknowledges genuine efforts to rectify unintentional lapses. The order ensures a fair approach to Customs Notification compliance and serves as a precedent for similar cases in the future.
FULL TEXT OF THE CESTAT KOLKATA ORDER
The revenue is in appeal against the impugned order wherein the adjudicating authority did not impose any redemption fine and penalty on the respondent.
2. The facts of the case are that the respondent obtained Zero Duty EPCG Authorization No.2130000128 dated 12.05.2011 was issued by the Asstt.Director General of Foreign Trade, under the Office of Jt. Director General of Foreign Trade, Patna along with the condition sheet (Annexure A), in which the terms and conditions of the said Authorization was incorporated. The said condition sheet states that:
i) The Authorization will be operative as per the provisions of Foreign Trade Poicy (2009-2014) and Handbook of Procedures (Vol.I) 2009-2014 or any other law/provision for the time being in force read with concerned Customs Notification No.102/2009-Cus dated 11.09.2009 as amended from time to time.
ii) The authorization holder shall execute Bank Guarantee/LUT (As the case may be) to Customs Authority before clearance of the first consignment as per Customs Circular No.58/2004 dated 10.2004 as amended from time to time.
iii) The authorization holder shall submit installation certificate to Regional Authority within six months from the date of completion of imports against the subject authorization.
iv) The Authorization holder is under obligation to export item worth US $ 1,442,091.33 i.e. 6 times the duty saved of Capital goods on FOB Basis within a period of 6 years. The export obligation shall be fulfilled by the use of the imported capital
v) The authorization holder is also required to maintain its average of the past three years export performance of the same and similar products.
vi) Authorization holder shall submit statement of export within three months from the expiry of block year duly certified by a chartered Accountant and concerned bank to the Regional He shall also submit yearly performance of export to the RA by 30th April of every year.
3. Para 5.8 of the Hand Book of Procedures (2009-14) Volume-I, has stipulated that License under the Zero duty EPCG scheme shall fulfill the export obligation over the specified period in the following proportions:-
