Kasare Vanya Silk Mills Pvt. Ltd. Vs Commissioner Customs (CESTAT Delhi)
EPCG exemption notification doesn’t exempt sericulture industry from requirement of export obligation: CESTAT Delhi
CESTAT Delhi held that EPCG Scheme exemption notification no. 102/2009-Cus dated 11.09.2009 in respect of sericulture industry exempts importer from requirement of maintaining average level of export, however, requirement of export obligation is not exempted.
Facts- The appellant set up a composite silk mill under a tripartite agreement executed between the Central Silk Board, Ministry of Textile (Govt. of India), Govt. of Chhattisgarh and the appellant. The appellant procured zero duty EPCG Authorization dated 09.12.2011 from the Joint Director, DGFT, Raipur. Since the appellant could not fulfill 50% of the export obligation in the first four years, a show cause notice dated 28.02.2017 was issued to the appellant demanding 50% of the duty foregone amounting to Rs. 33,36,620/- along with interest. The imported capital goods were also proposed to be confiscated and penal provisions were also invoked. The show cause notice also alleged that the capital goods imported by Bill of Entry No. 7712074 dated 21.08.2012 imported at JNCH had actually been diverted by the appellant for use elsewhere and, hence, the duty foregone on the capital goods amounting to Rs. 5,68,072/- was excluded. It was also the case of the department that the appellant had exceeded the duty foregone limit prescribed in the EPCG Authorization by an amount of Rs. 18,69,140/- in respect of two imports, which was also payable by the appellant. In the second show cause notice also, the capital goods were proposed to be confiscated and penalties were also proposed.
