Case Law Details
Makwuds India Private Limited Vs Commissioner of Customs (CESTAT Chennai)
In the order above-mentioned CESTAT allowed appeal of the assessee and held that that closure letter was already issued by the authority.
Appeal filed against the order-in-original wherein duty exemption availed by assessee against EPCG authorization for the import of goods under notification 97/2004 dt. 17.09.2004, were denied. AA (Adjudicating Authority) demanded custom duty of Rs. 1,13,36,651/- and interest and ordered confiscation of the capital goods u/s 111(o), giving option of redemption on the payment of redemption fine of Rs.10 lakhs. Penalty under Section 112 (a), for improper importation of goods, was also imposed.
It was submitted on behalf of the assesssee that it choose to avail the benefit of Amnesty Scheme by Public Notice No.2/2023 [F.No.18/15/AM-23/P-5] dated 01.04.2023 for one time settlement of default in export obligation by Advance and EPCG authorization holders and paid the entire Customs duty demanded in the adjudication order along with applicable interest for regularization. Thereafter, DGFT had issued Final Duty Paid Regularization letter dt. 01.04.2024 indicating the closure of the assessee’s case against payments of Customs duty with interest, for regularization of the case under Amnesty Scheme in terms of the above Public Notice. On the other hand, department concurred with the fact that of assessee was discharged of Customs duty along with interest as demanded in the impugned Order-in-Original in terms of the Amnesty Scheme.
After considering the submissions, CESTAT held that authority was not satisfied with the remittance of duty and interest as per the Amnesty Scheme and therefore closure letter was issued. There is no scope to confirm the penalty which is imposed on an alleged violation. Whole Amnesty Scheme did not specify anything about the penalty and is not viewed as irregularity or a malafide intention insofar as the non- fulfilment of export obligation is concerned. Hence, considering that closure letter was already issued, appeal was allowed and impugned order was set-aside.
FULL TEXT OF THE CESTAT CHENNAI ORDER
This appeal is filed against the Order-in-Original No.81769/2021 dated 24.03.2021 passed by the Commissioner of Customs, Chennai-IV, wherein the Original Authority has denied the duty exemption availed by the appellant against EPCG authorization for the import of goods under Notification No.97/2004-Cus. dated 17.09.2004. In the same order, the Adjudicating Authority has demanded Customs duty of Rs.1,13,36,651/- and interest and ordered confiscation of the capital goods in terms of Section 111 (o) of the Customs Act, 1962, giving option of redemption on the payment of redemption fine of Rs.10 lakhs. Penalty under Section 112 (a) ibid was also imposed.
2. Heard Ms. Swetha R.S., Ld. Advocate for the Appellant and Smt. O.M. Reena, Ld. Additional Commissioner for the Respondent.
3. Ms. Swetha, Ld. Advocate would submit, without disputing the facts, that the appellant chose to avail the benefit of Amnesty Scheme by Public Notice No.2/2023 [F.No.18/15/AM-23/P-5] dated 01.04.2023 for one time settlement of default in export obligation by Advance and EPCG authorization holders and paid the entire Customs duty demanded in the adjudication order along with applicable interest for regularization of appellant’s EPCG license, in pursuance whereof, the Dy. DGFT had issued Final Duty Paid Regularization letter dt. 01.04.2024 indicating the closure of the appellant’s case against payments of Customs duty with interest, for regularization of the case under Amnesty Scheme in terms of the above Public Notice. Ld. Advocate would thus pray for the deletion of penalty under Section 112 (a) ibid.
4. Per contra, O.M. Reena, Ld. Additional Commissioner concurred with the fact of appellant’s discharging Customs duty along with interest as demanded in the impugned Order-in-Original in terms of the Amnesty Scheme.
5. We have heard the rival contentions and perused the documents including the Public Notice ibid, a copy of which is placed on record by the Ld. Advocate. The following paragraphs in the said Public Notice are relevant for our reconsideration :
(I) Coverage :
i. Authorisations issued under Advance Authorisation Scheme (all variants) and EPCG Scheme (all variants) issued under Foreign Trade Policy, 2009-14 till 31-3-2015 are covered under the Scheme.
ii. For Authorizations issued under Advance Authorisation Scheme (all variants) and EPCG Scheme (all variants) issued under Foreign Trade Policy. 2004-2009 and before, the coverage is limited to those authorizations whose Export Obligation Period (original or extended) was valid beyond 12-8-2013.
(II) The Scheme
i. The scheme is called “Amnesty scheme for one time settlement of default in export obligation by Advance and IEPCG authorization holders”
ii. All pending cases of the default in meeting Export Obligation (EO) of authorizations mentioned in para (l) above can be regularised by the authorisation holder on payment of all customs duties that were exempted in proportion to unfulfilled Export Obligation and interest at the rate of 100% of such duties exempted. However, no interest is payable on the portion of Additional Customs Duty and Special Additional Customs Duty.
iii. ….
iv. ….
v. If there is partial default, the Regional Authority of DGFT on the basis of specific request of the applicant and on the basis of application filed for Export Obligation Discharge Certificate along with the necessary supporting documents, shall intimate to the applicant the details of default on which Customs duty and interest is payable.
vi. …
vii. …
viii. Based on the evidence of such payment and other relevant documents as prescribed under the Handbook of Procedures, concerned RA may examine the request and issue a letter granting Export Obligation Discharge Certificate (EODC).
ix. Even cases which have already been adjudicated (or pending adjudication), either originally or in appeal, can also be regularized under this Public Notice. The procedure for regularization of such cases would be as under :
a. In respect of cases which have already been adjudicated (or pending adjudication) and where appeal has not been filed, firms will produce a copy of this closure letter from the concerned RA, to the Adjudicating Authority.
b. In case an appeal has been filed, then this closure letter will have to be submitted to the Appellate Authority. On submission of such closure letter Adjudicating Authority/ Appellate Authority will decide on closure of such case/appeal and will inform the same to the Appellant and to the concerned RA.
6. From the copy of the T.R 6 challan placed on record, we find that the appellant has remitted the Customs duty along with interest on 27.03.2024.
7. In view of the above pleadings of the Advocate and upon consideration of the requirements of Public Notice No.2 (supra), we find that the Authority being satisfied with the remittance of duty and interest as per the Amnesty Scheme, has issued closure letter. Hence, there is no scope to confirm the penalty which is imposed on an alleged violation. Though Ld. Advocate has disputed leviability of penalty under Section 112 (a) ibid since the violation here is of EPCG scheme, for the reasons which were beyond the reach of the appellant but, however, we find that the whole Amnesty Scheme does not specify anything about the penalty and hence, it is possible that any violation insofar as the non- fulfilment of export obligation is concerned, is not viewed as irregularity or a mala fide intention.
8. In view of the above and going by the closure letter, we deem it appropriate to set aside the impugned order, set aside the penalty and allow the appeal.
(Order pronounced in the open court on 17.12.2024)
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