SUJANA INDUSTRIES LTD. Vs. COMMISSIONER OF CUSTOMS, HYDERABAD

JUDGEMENT

(1.) BY stay Order No. 807/04 dated 27 -7 -2004 the appellants were directed to pre -deposit the entire duty amount of Rs. 1,76,61,117/ - on the ground that they had failed to comply with the export obligation in terms of Notification No. 111/95, dated 5 -6 -95 read with para 38 of the EXIM Policy 1992 - 1997. The appellants being aggrieved with the stay order filed a miscellaneous application seeking modification of the order. By Miscellaneous Order No. 16/05, dated 6 -1 -2005 the prayer for modification was not accepted. However, they were granted three months time to comply with the terms of the stay order. The appellants deposited Rs. 30 lakhs and again moved an application for modification of the stay order. The Bench by Miscellaneous Order No. 246/05, dated 15 -4 -2005 did not accept their prayer for modification but were given extension of another three months time to comply with the terms of the stay order. They moved a fresh application seeking for modification of the stay order and also for remand of the case for de novo consideration. It is submitted by them in the present miscellaneous application that they had approached the Dte. General of Foreign Trade for granting extension of time to complete the export obligation. The same was considered and the DGFT by their letter dated 13 -7 -05 has granted them extension of time by five years up to 8 -3 -2008 subject to the conditions laid down in the letter. The appellants had filed all the necessary documents including the legal agreement/undertaking given by them to the DGFT undertaking to fulfil the terms of the export obligation under the scheme and in view of the fresh time granted to them by the extension letter dated 13 -7 -2005 in file No. 01/36/022/90/AM 96/EPCG -II/330, they submit that the impugned order is not sustainable. A report was called from the Commissioner with regard to the present application by which they contend that they were not required to deposit the amount as the EPCG licence had been extended and they have already given an undertaking to the DGFT. Ld. DR filed a reply from the Commissioner dated 9 -8 -2005. The reply states that the department contemplates to take up the matter with the DGFT for granting suo motu extension without taking the view into consideration/expression when the licence period has expired and the department has already passed an adjudication order confirming the demand and imposing penalty.

(2.) WE have heard both sides in the matter. We are of the considered view that the present order has become unsustainable in view of the fact that DGFT has granted extension of the term of the licence up to 18 -3 -2008. In terms of the present extension letter and the appellants have already given undertaking in the required format to the DGFT and in view of the present position the stay order requires to be modified. As the impugned order has become unsustainable on the ground of the DGFT granting extension of the licence to fulfil the export obligation, the impugned order is required to be set aside and the matter is required to be remanded to the original authority for de novo consideration. The original authority is required to initiate proceedings only on the appellants not fulfilling the term of the EPCG Licence the terms of their undertaking given by them. The department is entitled to initiate proceedings only if the present extension of time for export obligation is not fulfilled by the appellants. The impugned order is set aside and the matter is remanded to the original authority for de novo consideration on the basis of the above terms. Miscellaneous application, stay and appeal are allowed by way of remand.