Angel Starch & Foods Pvt Ltd Vs Commissioner of Customs (CESTAT Chennai)
The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), Chennai, in the case of Angel Starch & Foods Pvt Ltd v. Commissioner of Customs, partially allowed an appeal against an adjudication order that had denied the benefit of the Export Promotion Capital Goods (EPCG) Scheme for imported machinery, re-determined its value, ordered confiscation, and imposed a redemption fine and a penalty.
Factual Background
Angel Starch & Foods Pvt Ltd, a starch manufacturer, imported machinery declared for clearance under the zero-duty EPCG Scheme. Upon examination, Customs authorities found the goods to be second-hand machinery, which was not permitted under the EPCG Scheme following a policy amendment (DGFT Notification No. -1(RE-2013) 2009-14 dated 18-04-2013, amending Chapter 5, Para 5.1(e) of the Foreign Trade Policy, 2009-14). The department also alleged that the importer had misdeclared the value of the goods and suppressed the fact that they were used.
The importer’s counsel argued that they were unaware of the 2013 policy amendment and had a bona fide belief that second-hand goods were allowed. Crucially, the list of capital goods attached to the EPCG Authorization itself mentioned the year of manufacture as 1992 for one of the machines, which lent credence to the claim of good faith. Due to prolonged detention and accrued demurrage charges, the appellant opted not to contest the re-determined value set by the chartered engineer and paid the duty accordingly, but requested that no penal action be taken.
