CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL,
WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066.
DIVISION BENCH
Court No.2
Appeal No.C/24 & 28/2010-Cus
(Arising out of OIA No.21/2009 dt.30.10.2009 passed by Commssioner of Customs (Preventive), New Delhi)
Date of hearing: 19.06.2014
Date of Pronouncement:11.7.2014
Nijhawan Travel Services Pvt.Ltd. Appellant
Shri Sham Nijhawan, Managing Director
Vs.
CC, New Delhi Respondent
Present for the Appellant: Shri K.Kant, Advocate
Present for the Respondent :Shri R.L.Meena, DR
Coram: Hon ble Mr.D.N.Panda, Judicial Member
Hon ble Mr.Manmohan Singh, Technical Member
FINAL ORDER NO.52773-52774/2014
PER: D.N.PANDA
M/s.Nijhawan Travels Services Pvt.Ltd. imported one Mercedes SL500 on 1.6.2005 on the basis of EPCG licence No.0530137584 dated 10.12.2004 issued to it under certain terms and conditions attached to that. The licence so granted was to export service within eight years of grant of licence to discharge export obligation. The car imported above was subject to actual user condition. Appellant was required to submit statement of export within three months from the expiry of block year duly certified by Chartered Accountant and concerned bank to the licensing authority.
2. The relevant conditions attached to the EPCG Licence required as under:-
1. Condition No.1 stipulated that the said licence had been issued under chapter 5 of Foreign Trade Policy 2004-09 and was subject to the conditions laid down in the said chapter.
2. Condition No.2 stipulated that export obligation shall be fulfilled by the user of the imported capital goods.
3. Condition No.6 stipulated that the import of capital goods under the subject licence should be subject to Actual User Condition .
4. Condition No.9 stipulated that the capital goods imported was to be installed at M/s, NTSPL,F-53,Bhagat Singh Market, New Delhi.
5. Condition No.10 stipulated that the licence would be operative as per the provisions of Foreign Trade policy and Hand Book of Procedures 2004-09 or any other law/provisions for the time being in force.
3.1 Investigation to the import made on 24.9.2008 noticed that the Mercedes car imported by the appellant company was not used for tour and travels to earn foreign exchange. Therefore that was seized on that date in terms of panchnama on the ground that condition of import under EPCG scheme was violated. Statement recorded from Sri Rajendra Prasad Verma, driver showed that the Mercedes car with registration No.DL 1CK 2525 was always parked at the residence of Sham Nijhawan, who was managing director of the appellant company. He stated that the car was lying with owner and driven by him. No driver was driving such vehicle.
3.2 Shri Ram Anju, Security Guard engaged at the residence of Shri Sham Nijhawan in his statement stated that car was driven by Sri Sham Nijhawan only and never driven any driver.
4. Shri Arjun Nijhawan, son of Shri Sham Nijhawan in his statement dt.24.9.2008 stated that he was looking after taxi division/car rental branch of the appellant company for the last one and half years and Mercedes car registered as No.DL 1CK 2525 was parked in a garage at the residence of Shri Sham Nijhawan and not driven by any staff or drivers. That car was never provided to any corporate on rent as per log book of cars maintained.
5. When Shri Sham Nijhawan was examined on 24.9.2008, he stated that they did not have Mercedes car in their fleet for rental services and never provided on rental basis. He further stated that the car imported as above was registered as private vehicle while payment for the purchase of this car was made from company s account. He categorically admitted that imported car was not used for commercial purpose to earn foreign exchange. Therefore, they did not intimate any government authority about earning foreign exchange using this car.
6. Enquiry made with State Transport Authority revealed that the car imported as above was registered with fancy registration number and in the affidavit filed before registering authority, the owner of the vehicle averred that the car shall not be used for taxi purpose. It also came to light of the investigation that the car was registered in the private car category. No log book was maintained to prove the use of the car. That was also found parked at the residence of Shri Sham Nijhawan.
7. On the aforesaid premise, investigation reached to the following conclusions that:-
(i) M/s.Nijhawan Travel Services Pvt.Ltd. (NTSPL) had applied to DGFT for grant of licence under EPCG Scheme to import a Mercedes Benz SL 500 car. In its application dated 21.11.2004 it had declared themselves as service provider. It had further declared that the vehicles would be installed at F-53, Bhagat Singh Market, New Delhi. On the basis of the above said application, M/s. NTSPL was granted the license No. 0530137584/11/00 dated 10.12.2004 under EPCG scheme mentioned as above. The import was subject to Actual User condition and the conditions, interalia, stated that the export obligation shall be fulfilled by the use of the imported car and that shall be installed at f-53, Bhagat Singh Market, New Delhi. M/s. NTSPL had imported the said vehicle claiming duty exemptions under Notification No. 97/2004-Customs dated 17.09.2004 and the details of the Customs duty saved were also given in item list attached to the licence.
(ii) The imported Mercedes Benz SL 500 car Regn. No. DL ICK 2525 was not installed at F-53, Bhagat Singh Market, New Delhi, as stipulated in the EPCG licence under which it was imported. The physical possession of the Mercedes Benz SL 500 car was with Shri Sham Nijhawan, MD of M/s. NTSPL.
(iii). The installation certificate in respect of the imported Mercedes-Benz SL500 car was not submitted to the port of clearance i.e. ICD Tughlakbad, New Delhi within stipulated time.
(iv). M/s.NTSPL neither used the vehicle for use of foreign tourists, the purpose for which they were allowed to be imported, nor had they maintained any records in that behalf under EPCG scheme. Shri Sham Nijhawan, MD of M/s.NTSPL admitted that he had been using the car for personal/ private purposes and it was always parked at his residence. This has been also confirmed by Shri Arjun Nijhawan son of Sh.Sham Nijhawan, driver and security guard have stated that the said vehicles were always parked at the residence of Sh.Sham Nijhawan situated at A-1/1, Vasant Vihar, New Delhi. In fact, the above said vehicle was found parked at the said residential premises at the time of its seizure. This clearly shows that the said vehicle had indeed been imported for the private and exclusive use of Shri Sham Nijhawan.
(v). The car imported under EPCG had been registered as private vehicle in non-transport/non-commercial category, with fancy/VIP registration number. The insurance policy in respect of the said vehicle was taken declaring them as private car . Further, in an Affidavit dated 04.06.2005, submitted to the Transport Authority, it had been stated that the car was not for hiring or taxi purposes. This indicated that the imported vehicle was always used as private vehicle and there was no intention on the part of M/s.NTSPL to use the said vehicle as tourist vehicles to earn foreign exchange.. Had there been any bonafide intention on the part of M/s.NTSPL, the imported vehicles would have been registered as tourist vehicle and the corresponding insurance policy would have been taken as applicable to commercial use.
(vi). There were no direct foreign exchange earnings from the use of the imported car from the date of import thereof as admitted by Shri Sham Nijhawan, MD of M/s.NTSPL.
(vii). No export obligation certificate/Export performance statement against EPCG licence was submitted by M/s.NTSPL to the office of the DGFT or to the Customs department.
(viii). The imported vehicle was not registered as Tourist Vehicle by 31/8/08 as stipulated by DGFT s Circular No.7(RE-08) 2003-04 dated 7.5.08.
8. From the facts and circumstances brought out by the investigation as detailed above it appeared that though M/s NTSPL imported the vehicles under the EPCG Scheme, it never had complied with the conditions of the license except using the car exclusively for personal and private purpose of its Managing Director, Sh. Sham Nijhawan.
9. It appeared to investigation that in view of Para 14, 14(i) to 14(6) of the SCN dated 2.2.09 M/s NTSPL have contravened the law relating to import in the following manner:
(a) The provision of section 11 of the FTDR Act, 1992 and Rule 14 (1) of the FTRR, 1993 were violated deliberately making false and incorrect declarations before the DGFT authorities and EPCG licences obtained fraudulently to import the vehicle under the EPCG scheme in contravention of prohibitions imposed under Rule 14(2) of the FTRR, 1993, with an intention to evade the payment of customs duty payable on the car.
(b) Condition No. 2 of the EPCG licence and Para 5.4 of the Foreign Trade Policy was violated by not fulfilling the export obligation by actually using the vehicles for export of transport service.
(c) Condition No.6 of the CPCG licence was violated possessing and controlling as well as making personal use of the car by Shri Sham Nijhawan.
(d) Condition No.9 of the EPCG licence was violated not installing the vehicle at the declared place.
(e) Conditions of para 5.15 of the Hand Book of Procedures Vol. 1 (Foreign Trade Policy 2004-09) was violated not maintaining any records of use of the imported car.
(f) Provisions of Notification No. 97/2004 dated 17.09.2004 was violated not furnishing the installation certificate, and not using the imported vehicles for earning freely convertible foreign currency from services rendered to tourists.
(g) For the reasons stated above, the imported vehicle was liable to confiscation under section 111(d) and 111(o) of the Customs Act, 1962 as well as penalty under 112 (a) and /or section 114A of the Customs Act, 1962.
10. Making allegations of aforesaid nature, show cause notice dated 2.2.2009 was issued proposing following consequences:-
(a) The Mercedes Benz SL 500 car bearing registration number DL 1 CK 2525, having assessable value of Rs. 53,70,525/-, imported and cleared availing duty exemption fraudulently under Notification Nos. 44/2002-Cus dated 19.04.2002, and 97/2004-Cus dated 17.09.2004, was to be confiscated under section 111 (d) and 111 (o) of the Customs Act, 1962 and levy appropriate fine warranted under section 125 of the Customs Act, 1962.
(b) Total differential Customs duty amounting to Rs. 51,86,378/-(Rupees fifty one lacs, eighty six thousand, three hundred &seventy eighty only) was liable to be imposed under the proviso to Section 28(1) of the Customs Act, 1962 alongwith interest in terms of Section 28 AB thereof read with conditions of the said EPCG licence No. 0530137584/3/11/00 as well as Customs Notification No. 97/2004-customs dated 17.09.2004.
(c) Penalty was proposed to be imposed on M/s NTSPL under Section 112 (a) and /or 114 of the Customs Act, 1962,
(d) Penalty was also proposed to be imposed on Shri Sham Nijhawan, Managing Director, M/s. NTSPL, under Section 112(b) of the Customs Act, 1962 for the omission and commission in relation the import of the above vehicles in violation of the conditions of EPCG Scheme.
11. Ld.Counsel for the appellant in the course of hearing did not dispute that import of the car and registration thereof was meant for earning foreign exchange from exporting service. That was verified and found to be private car. He submitted that the transport authority did not register the car as taxi. Considering such difficulty government issued a circular No.2/(RE-2012)/2009-14 dated 19.07.2012 and in terms of the said circular, the vehicle was not required to be registered as Tourist Vehicles till 19.7.2012. Appellant has fulfilled the export obligation for which adjudication is unsustainable. Export obligation was to be discharged within eight years of import. When the import was made on 1.6.2005 and investigation was made on 24.9.2008 that is premature stage to make allegation when last year for discharge of export obligation was by 2013. Vehicle was used in transporting VIPs and the managing director Shri Sham Nijhawan was using the said imported car to receive VIP tourist at the airport. When the foreign exchange was earned using that vehicle there was no violation of import condition. Ld.Advocate relied on the decision of the Tribunal reported as M Far Hotels Ltd. Vs. CCE, Cochin-2009 (241) ELT 94 (Tri.-Bang.) and CC, New Delhi vs. Som Dutt Builders Ltd.-2009 (236) ELT 478 (Tri.-Del.).
12. Revenue on the other hand submitted that the car imported under EPCG scheme was registered as private vehicle in non-transport/non commercial category. The insurance policy in respect of the said vehicle was taken declaring the car as private car . Further in an affidavit dated 04.06.2005 filed before the transport authority, it was stated that the car was not used for taxi purposes. When the car was not used for the purpose that was imported that violates the import condition. Revenue relied on following finding of the Commissioner:-
(i) That the importer was required to produce within 30 days from the expiry of each block year to the Customs Authorities the extent of export made by him. In the absence of such fulfillment, the importer shall proportionately pay duty alongwith interest @ 15% per annum.
(ii) A certificate from the jurisdictional DC/AC of Central Excise or by an independent chartered engineer was not furnished within six months from the date of completion of export regarding installation of the imported goods.
(iii) Explanation (4)(ii) to the notification conveys in clear words that Export obligations in relation to importer rendering services means receiving payments in freely convertible currency for services rendered through the use of capital goods. But that was not fulfilled by the appellant.
13. Revenue also submitted that following violation of law was made by appellant:
(a) The provisions of Section 11 of the FTDR Act, 1992 and Rule 14(1) of the FTRR, 1993, were deliberately violated making false and incorrect declarations before the DGFT authorities EPCG licences was obtained fraudulently to import the vehicle under that scheme. Prohibitions imposed by Rule 14(2) of the FTRR, 1993. There was violation of law with an intention to evade the payment of customs duty at the time of import.
(b) Condition No. 2 of the EPCG licence and Para 5.4 of the Foreign Trade Policy was not complied with in absence of export obligation discharged making use of the vehicle.
(c) Condition No.6 of the EPCG licence was violated allowing possession and control of vehicle and permitting personal use thereof by Shri Sham Niihawan.
(d) Condition No. 9 of the EPCG licence was violated without installing the vehicle at the declared place.
(e) Conditions of para 5.15 of the Hand Book of Procedures Vol. 1 (Foreign Trade Policy 2004-09) was violated for non maintenance of records relating to the use of the imported car.
(f) Provisions of Notification No. 97/2004 dated 17.09.2004 was violated without furnishing the installation certificate, and not using the imported vehicles for earning freely convertible foreign currency from services rendered to tourists.
14. Heard both sides and perused the record.
15. When the car was not used for the purpose it was meant, there was no foreign exchange earning made by the appellant for which it failed to discharge export obligation. Investigation brought out entire truth of the import and gross violation of the import condition in para 12 of the show cause notice. No use of the car for commercial purpose came to record. Para 5.4 of handbook procedure was not followed by the appellant. Therefore adjudication cannot be said to be erroneous. That should sustain. Appeal is dismissed accordingly on first principle noticing abuse of the EPCG licence.
14. In view of above material facts of to the case there is no necessity to deal with the cited decisions which were on altogether different facts.
(pronounced in the open court on 11.7.2014)
(MANMOHAN SINGH) (D.N.PANDA)
TECHNICAL MEMBERR JUDICIAL MEMBER
mk
5
15
Appeal No.C/24 & 28/2010
WEST BLOCK NO.II, R.K. PURAM, NEW DELHI-110066.
DIVISION BENCH
Court No.2
Appeal No.C/24 & 28/2010-Cus
(Arising out of OIA No.21/2009 dt.30.10.2009 passed by Commssioner of Customs (Preventive), New Delhi)
Date of hearing: 19.06.2014
Date of Pronouncement:11.7.2014
Nijhawan Travel Services Pvt.Ltd. Appellant
Shri Sham Nijhawan, Managing Director
Vs.
CC, New Delhi Respondent
Present for the Appellant: Shri K.Kant, Advocate
Present for the Respondent :Shri R.L.Meena, DR
Coram: Hon ble Mr.D.N.Panda, Judicial Member
Hon ble Mr.Manmohan Singh, Technical Member
FINAL ORDER NO.52773-52774/2014
PER: D.N.PANDA
M/s.Nijhawan Travels Services Pvt.Ltd. imported one Mercedes SL500 on 1.6.2005 on the basis of EPCG licence No.0530137584 dated 10.12.2004 issued to it under certain terms and conditions attached to that. The licence so granted was to export service within eight years of grant of licence to discharge export obligation. The car imported above was subject to actual user condition. Appellant was required to submit statement of export within three months from the expiry of block year duly certified by Chartered Accountant and concerned bank to the licensing authority.
2. The relevant conditions attached to the EPCG Licence required as under:-
1. Condition No.1 stipulated that the said licence had been issued under chapter 5 of Foreign Trade Policy 2004-09 and was subject to the conditions laid down in the said chapter.
2. Condition No.2 stipulated that export obligation shall be fulfilled by the user of the imported capital goods.
3. Condition No.6 stipulated that the import of capital goods under the subject licence should be subject to Actual User Condition .
4. Condition No.9 stipulated that the capital goods imported was to be installed at M/s, NTSPL,F-53,Bhagat Singh Market, New Delhi.
5. Condition No.10 stipulated that the licence would be operative as per the provisions of Foreign Trade policy and Hand Book of Procedures 2004-09 or any other law/provisions for the time being in force.
3.1 Investigation to the import made on 24.9.2008 noticed that the Mercedes car imported by the appellant company was not used for tour and travels to earn foreign exchange. Therefore that was seized on that date in terms of panchnama on the ground that condition of import under EPCG scheme was violated. Statement recorded from Sri Rajendra Prasad Verma, driver showed that the Mercedes car with registration No.DL 1CK 2525 was always parked at the residence of Sham Nijhawan, who was managing director of the appellant company. He stated that the car was lying with owner and driven by him. No driver was driving such vehicle.
3.2 Shri Ram Anju, Security Guard engaged at the residence of Shri Sham Nijhawan in his statement stated that car was driven by Sri Sham Nijhawan only and never driven any driver.
4. Shri Arjun Nijhawan, son of Shri Sham Nijhawan in his statement dt.24.9.2008 stated that he was looking after taxi division/car rental branch of the appellant company for the last one and half years and Mercedes car registered as No.DL 1CK 2525 was parked in a garage at the residence of Shri Sham Nijhawan and not driven by any staff or drivers. That car was never provided to any corporate on rent as per log book of cars maintained.
5. When Shri Sham Nijhawan was examined on 24.9.2008, he stated that they did not have Mercedes car in their fleet for rental services and never provided on rental basis. He further stated that the car imported as above was registered as private vehicle while payment for the purchase of this car was made from company s account. He categorically admitted that imported car was not used for commercial purpose to earn foreign exchange. Therefore, they did not intimate any government authority about earning foreign exchange using this car.
6. Enquiry made with State Transport Authority revealed that the car imported as above was registered with fancy registration number and in the affidavit filed before registering authority, the owner of the vehicle averred that the car shall not be used for taxi purpose. It also came to light of the investigation that the car was registered in the private car category. No log book was maintained to prove the use of the car. That was also found parked at the residence of Shri Sham Nijhawan.
7. On the aforesaid premise, investigation reached to the following conclusions that:-
(i) M/s.Nijhawan Travel Services Pvt.Ltd. (NTSPL) had applied to DGFT for grant of licence under EPCG Scheme to import a Mercedes Benz SL 500 car. In its application dated 21.11.2004 it had declared themselves as service provider. It had further declared that the vehicles would be installed at F-53, Bhagat Singh Market, New Delhi. On the basis of the above said application, M/s. NTSPL was granted the license No. 0530137584/11/00 dated 10.12.2004 under EPCG scheme mentioned as above. The import was subject to Actual User condition and the conditions, interalia, stated that the export obligation shall be fulfilled by the use of the imported car and that shall be installed at f-53, Bhagat Singh Market, New Delhi. M/s. NTSPL had imported the said vehicle claiming duty exemptions under Notification No. 97/2004-Customs dated 17.09.2004 and the details of the Customs duty saved were also given in item list attached to the licence.
(ii) The imported Mercedes Benz SL 500 car Regn. No. DL ICK 2525 was not installed at F-53, Bhagat Singh Market, New Delhi, as stipulated in the EPCG licence under which it was imported. The physical possession of the Mercedes Benz SL 500 car was with Shri Sham Nijhawan, MD of M/s. NTSPL.
(iii). The installation certificate in respect of the imported Mercedes-Benz SL500 car was not submitted to the port of clearance i.e. ICD Tughlakbad, New Delhi within stipulated time.
(iv). M/s.NTSPL neither used the vehicle for use of foreign tourists, the purpose for which they were allowed to be imported, nor had they maintained any records in that behalf under EPCG scheme. Shri Sham Nijhawan, MD of M/s.NTSPL admitted that he had been using the car for personal/ private purposes and it was always parked at his residence. This has been also confirmed by Shri Arjun Nijhawan son of Sh.Sham Nijhawan, driver and security guard have stated that the said vehicles were always parked at the residence of Sh.Sham Nijhawan situated at A-1/1, Vasant Vihar, New Delhi. In fact, the above said vehicle was found parked at the said residential premises at the time of its seizure. This clearly shows that the said vehicle had indeed been imported for the private and exclusive use of Shri Sham Nijhawan.
(v). The car imported under EPCG had been registered as private vehicle in non-transport/non-commercial category, with fancy/VIP registration number. The insurance policy in respect of the said vehicle was taken declaring them as private car . Further, in an Affidavit dated 04.06.2005, submitted to the Transport Authority, it had been stated that the car was not for hiring or taxi purposes. This indicated that the imported vehicle was always used as private vehicle and there was no intention on the part of M/s.NTSPL to use the said vehicle as tourist vehicles to earn foreign exchange.. Had there been any bonafide intention on the part of M/s.NTSPL, the imported vehicles would have been registered as tourist vehicle and the corresponding insurance policy would have been taken as applicable to commercial use.
(vi). There were no direct foreign exchange earnings from the use of the imported car from the date of import thereof as admitted by Shri Sham Nijhawan, MD of M/s.NTSPL.
(vii). No export obligation certificate/Export performance statement against EPCG licence was submitted by M/s.NTSPL to the office of the DGFT or to the Customs department.
(viii). The imported vehicle was not registered as Tourist Vehicle by 31/8/08 as stipulated by DGFT s Circular No.7(RE-08) 2003-04 dated 7.5.08.
8. From the facts and circumstances brought out by the investigation as detailed above it appeared that though M/s NTSPL imported the vehicles under the EPCG Scheme, it never had complied with the conditions of the license except using the car exclusively for personal and private purpose of its Managing Director, Sh. Sham Nijhawan.
9. It appeared to investigation that in view of Para 14, 14(i) to 14(6) of the SCN dated 2.2.09 M/s NTSPL have contravened the law relating to import in the following manner:
(a) The provision of section 11 of the FTDR Act, 1992 and Rule 14 (1) of the FTRR, 1993 were violated deliberately making false and incorrect declarations before the DGFT authorities and EPCG licences obtained fraudulently to import the vehicle under the EPCG scheme in contravention of prohibitions imposed under Rule 14(2) of the FTRR, 1993, with an intention to evade the payment of customs duty payable on the car.
(b) Condition No. 2 of the EPCG licence and Para 5.4 of the Foreign Trade Policy was violated by not fulfilling the export obligation by actually using the vehicles for export of transport service.
(c) Condition No.6 of the CPCG licence was violated possessing and controlling as well as making personal use of the car by Shri Sham Nijhawan.
(d) Condition No.9 of the EPCG licence was violated not installing the vehicle at the declared place.
(e) Conditions of para 5.15 of the Hand Book of Procedures Vol. 1 (Foreign Trade Policy 2004-09) was violated not maintaining any records of use of the imported car.
(f) Provisions of Notification No. 97/2004 dated 17.09.2004 was violated not furnishing the installation certificate, and not using the imported vehicles for earning freely convertible foreign currency from services rendered to tourists.
(g) For the reasons stated above, the imported vehicle was liable to confiscation under section 111(d) and 111(o) of the Customs Act, 1962 as well as penalty under 112 (a) and /or section 114A of the Customs Act, 1962.
10. Making allegations of aforesaid nature, show cause notice dated 2.2.2009 was issued proposing following consequences:-
(a) The Mercedes Benz SL 500 car bearing registration number DL 1 CK 2525, having assessable value of Rs. 53,70,525/-, imported and cleared availing duty exemption fraudulently under Notification Nos. 44/2002-Cus dated 19.04.2002, and 97/2004-Cus dated 17.09.2004, was to be confiscated under section 111 (d) and 111 (o) of the Customs Act, 1962 and levy appropriate fine warranted under section 125 of the Customs Act, 1962.
(b) Total differential Customs duty amounting to Rs. 51,86,378/-(Rupees fifty one lacs, eighty six thousand, three hundred &seventy eighty only) was liable to be imposed under the proviso to Section 28(1) of the Customs Act, 1962 alongwith interest in terms of Section 28 AB thereof read with conditions of the said EPCG licence No. 0530137584/3/11/00 as well as Customs Notification No. 97/2004-customs dated 17.09.2004.
(c) Penalty was proposed to be imposed on M/s NTSPL under Section 112 (a) and /or 114 of the Customs Act, 1962,
(d) Penalty was also proposed to be imposed on Shri Sham Nijhawan, Managing Director, M/s. NTSPL, under Section 112(b) of the Customs Act, 1962 for the omission and commission in relation the import of the above vehicles in violation of the conditions of EPCG Scheme.
11. Ld.Counsel for the appellant in the course of hearing did not dispute that import of the car and registration thereof was meant for earning foreign exchange from exporting service. That was verified and found to be private car. He submitted that the transport authority did not register the car as taxi. Considering such difficulty government issued a circular No.2/(RE-2012)/2009-14 dated 19.07.2012 and in terms of the said circular, the vehicle was not required to be registered as Tourist Vehicles till 19.7.2012. Appellant has fulfilled the export obligation for which adjudication is unsustainable. Export obligation was to be discharged within eight years of import. When the import was made on 1.6.2005 and investigation was made on 24.9.2008 that is premature stage to make allegation when last year for discharge of export obligation was by 2013. Vehicle was used in transporting VIPs and the managing director Shri Sham Nijhawan was using the said imported car to receive VIP tourist at the airport. When the foreign exchange was earned using that vehicle there was no violation of import condition. Ld.Advocate relied on the decision of the Tribunal reported as M Far Hotels Ltd. Vs. CCE, Cochin-2009 (241) ELT 94 (Tri.-Bang.) and CC, New Delhi vs. Som Dutt Builders Ltd.-2009 (236) ELT 478 (Tri.-Del.).
12. Revenue on the other hand submitted that the car imported under EPCG scheme was registered as private vehicle in non-transport/non commercial category. The insurance policy in respect of the said vehicle was taken declaring the car as private car . Further in an affidavit dated 04.06.2005 filed before the transport authority, it was stated that the car was not used for taxi purposes. When the car was not used for the purpose that was imported that violates the import condition. Revenue relied on following finding of the Commissioner:-
(i) That the importer was required to produce within 30 days from the expiry of each block year to the Customs Authorities the extent of export made by him. In the absence of such fulfillment, the importer shall proportionately pay duty alongwith interest @ 15% per annum.
(ii) A certificate from the jurisdictional DC/AC of Central Excise or by an independent chartered engineer was not furnished within six months from the date of completion of export regarding installation of the imported goods.
(iii) Explanation (4)(ii) to the notification conveys in clear words that Export obligations in relation to importer rendering services means receiving payments in freely convertible currency for services rendered through the use of capital goods. But that was not fulfilled by the appellant.
13. Revenue also submitted that following violation of law was made by appellant:
(a) The provisions of Section 11 of the FTDR Act, 1992 and Rule 14(1) of the FTRR, 1993, were deliberately violated making false and incorrect declarations before the DGFT authorities EPCG licences was obtained fraudulently to import the vehicle under that scheme. Prohibitions imposed by Rule 14(2) of the FTRR, 1993. There was violation of law with an intention to evade the payment of customs duty at the time of import.
(b) Condition No. 2 of the EPCG licence and Para 5.4 of the Foreign Trade Policy was not complied with in absence of export obligation discharged making use of the vehicle.
(c) Condition No.6 of the EPCG licence was violated allowing possession and control of vehicle and permitting personal use thereof by Shri Sham Niihawan.
(d) Condition No. 9 of the EPCG licence was violated without installing the vehicle at the declared place.
(e) Conditions of para 5.15 of the Hand Book of Procedures Vol. 1 (Foreign Trade Policy 2004-09) was violated for non maintenance of records relating to the use of the imported car.
(f) Provisions of Notification No. 97/2004 dated 17.09.2004 was violated without furnishing the installation certificate, and not using the imported vehicles for earning freely convertible foreign currency from services rendered to tourists.
14. Heard both sides and perused the record.
15. When the car was not used for the purpose it was meant, there was no foreign exchange earning made by the appellant for which it failed to discharge export obligation. Investigation brought out entire truth of the import and gross violation of the import condition in para 12 of the show cause notice. No use of the car for commercial purpose came to record. Para 5.4 of handbook procedure was not followed by the appellant. Therefore adjudication cannot be said to be erroneous. That should sustain. Appeal is dismissed accordingly on first principle noticing abuse of the EPCG licence.
14. In view of above material facts of to the case there is no necessity to deal with the cited decisions which were on altogether different facts.
(pronounced in the open court on 11.7.2014)
(MANMOHAN SINGH) (D.N.PANDA)
TECHNICAL MEMBERR JUDICIAL MEMBER
mk
5
15
Appeal No.C/24 & 28/2010
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