2025-VIL-1956-CESTAT-DEL-CU
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CUSTOMS CESTAT Cases

Customs – Import of cars under EPCG scheme, discharge export obligation, foreign exchange earnings - Appellant imported cars under the EPCG scheme and claimed the benefit of Notification No. 49/2000 and Notification No. 44/2002 - Appellant fulfilled the export obligation by rendering various services related to tourism and travelling. The DGFT issued EODCs for two of the licenses. However, the third EODC was kept pending due to an investigation initiated by the DRI regarding the import of the cars - Whether the export obligation had to be fulfilled only through the exclusive use of the imported cars, or could it be fulfilled through the overall foreign exchange earnings from the appellant's tourism and travel-related services – HELD - The requirement of scheme is actual use of the capital goods imported under EPCG Scheme to render services to earn foreign exchange, and not that services rendered through the exclusive use of capital goods imported would only be considered for considering fulfilment of export obligation - The foreign exchange earned by the appellant through its tourism and travel-related services, including hotel accommodation, food and beverages, and transportation of tourists, should be considered towards the discharge of the export obligation under the EPCG scheme. The DGFT clarification also stated that in the hotel, tourism and travel service industry, the vehicles are part of an overall package, and it is not practically possible to show export earnings separately from the use of these vehicles. The DGFT had explicitly stated that all earnings from the hotel, travel and tourism activities should be eligible for consideration towards the discharge of the export obligation - the appellant had fulfilled its export obligation under the EPCG scheme and was entitled to the benefit of the relevant notifications – The impugned order is set aside and the appeal is allowed - Whether the customs authorities had the jurisdiction to scrutinize the validity of the EODCs issued by the DGFT – HELD - Once the EODCs had been issued by the DGFT, the same was deemed to be the completion of all export obligations – Further, the Supreme Court had set aside the Tribunal's earlier observation that the holding of the EODC was not determinative of the fulfillment of the export obligation. The holding of the EODCs was determinative of the appellant completing its export obligations, and the Customs authorities did not have the jurisdiction to sit in judgment over the EODC issued by the DGFT.
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