PAMBAN APPARELS LIMITED Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) THE appellants had imported second -hand machinery under EPCG licence No. 2134160 dated 27.4.95 issued by the Director -General of Foreign Trade ('DGFT' for short). These machines were cleared at concessional rate of duty under Notification No. 160/92 -Cus dated 20.4.92 vide Bill of Entry No. 235 dated 20.4.1995. Under the EPCG Scheme, the appellants had an obligation to export their finished goods (cotton, nylon and acrylic socks) worth US 11,46,422 within a period of five years from the date of issue of the licence. Towards the end of this period, the Customs authorities issued a show -cause notice to the party demanding the duty forgone amounting to Rs. 10,91,244/ -, under Section 28 of the Customs Act. This notice also proposed confiscation of the machinery under Section 111(o) of the Act. A penalty was also proposed on the importer under Section 112 (a) of the Act. The notice contested the proposals by submitting that the show -cause notice, issued before expiry of the validity period of the licence, was premature. They also submitted that they had not been able to fulfil export obligation on account of financial difficulties and that their application for rehabilitation was pending before BIFR. Ld. Commissioner of Customs, in adjudication of the show -cause notice, confirmed the demand of duty against the importer, ordered confiscation of the machinery with option for redemption against payment of fine and imposed a penalty on the party. The present appeal is against the Commissioner's order.

(2.) AFTER hearing both sides and considering their submissions, we come to know that the DGFT has since certified that the appellants fulfilled export obligation under the above licence. Learned Counsel has placed on record a letter dated 9.10.2004 of the Foreign Trade Development Officer in proof of this fact. This document is accompanied by statements containing particulars of discharge of export obligation. We have heard ld. JDR also.

(3.) NOW that the appellants claim to have discharged export obligation under the EPCG licence and to have already obtained the requisite certificate from the DGFT, it is for the Commissioner to consider this claim and take appropriate decision. Therefore, the impugned order is set aside and the appeal is allowed by way of remand with a direction to the Commissioner of Customs to pass fresh order of adjudication after giving the party a reasonable opportunity to prove the above claim as also to be personally heard.