2026-VIL-371-CESTAT-HYD-CU
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CUSTOMS CESTAT Cases

Customs - EPCG Scheme - Appellant imported capital goods under EPCG scheme and availed concessional customs duty. The goods were seized for non-fulfilment of export obligation within the stipulated period - Whether the confiscation of the imported goods under Section 111(o) and imposition of penalty under Section 112(a) are legally valid – HELD - In this case, the demand has been confirmed on the ground that the appellants have not met the export obligation, despite the reduction in the value of export obligation by the DGFT and extension of time limit till the time of passing of the impugned Adjudication order – the impugned order confirming demand has been passed without hearing the appellant and also without appreciating their pending request to Competent Authority for allowing certain further time for including third party export and duty as also computation of duty based on depreciated value of capital goods. Thus, on this count itself, the confirmation of demand of differential duty without considering all relevant factual matrix and certain specific provisions in the notification itself i.e. condition 3 of Notification No. 28/97 dated 01.04.1997 for proper calculation of duty required to be paid for non-fulfilment of export obligation in part of full, is not proper - The permissible export made by them during intervening period will also have to be considered in terms of provisions under the Notification and EXIM Policy. Thus, to this extent impugned order confirming demand of differential duty is set aside and remanded back for re-computation - Further, the non-fulfilment of the export obligation was not deliberate, but due to the non-availability of the seized machinery and prevailing market conditions, which made it an act of impossibility. Therefore, the confiscation and penalty are not legally sustainable – The appeal is allowed partly allowed by remand
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