The Customs, Excise and Service Tax Appellate Tribunal (CESTAT) bench of New Delhi has held that where the amnesty scheme does not provide for payment for any penalty, non- fulfilment of export obligation under Export Promotion Capital Goods (EPCG) license cannot be considered as an irregularity.
The bench headed by Dr. Suvendu Kumar Pati (Judicial member) observed that the amnesty scheme would also be applicable to appeals pending before tribunals and thus set aside the impugned order.
The Appellant / assessee imported Coordinate Measuring machine without payment of import duty under EPCG license. Due to failure to meet the export obligation, a Show- Cause Notice was issued demanding recovery of duty with interest,redemption fine, confiscation of imported capital goods and imposing penalty. Consequently, an adjudication order was passed confirming the duty demand, etc. The same was also affirmed by the Commissioner Appeals. Hence, an appeal was filed before the tribunal.
The appellant / assessee availed the benefit of the amnesty scheme launched on 01.04.2023 and therefore limited its grounds only to the imposition of penalty and redemption fine and its enforcement.
The appellant / assessee argued that once closure letter is filed before the Authority in pending appeals as per the scheme, they will decide on such closure. It was further argued that the scheme does not contemplate payment of any redemption fine or penalty.
The revenue, on the other hand, contended that appeal filed before the first appellate authority is only covered under the Amnesty scheme and the same would not apply to tribunals.
The bench examined clause (ix) of the Amnesty scheme and observed that the language of the scheme is such that it was meant to also cover appeals pending before the tribunals. Reliance was placed by the bench on the judgment in M/S Makwuds India Pvt. Ltd. vs The Commissioner of Customs, Chennai- IV wherein it was observed that the entire amnesty scheme does not specify anything about penalty and hence it is possible that any violation with respect to non-fulfilment of export obligation is not viewed as irregularity.
Hence, it was held that since the Act / omission has been regularised through the Amnesty scheme, the order passed by the Commissioner (appeals) is set aside. Therefore, the appeal was allowed.
Case Details
Case title: M/s New Poly Tech Engineers vs Commissioner of Customs
Case No: Customs appeal 86781 of 2019
Date of decision: 25.03.2025
Counsel for Appellant: Shri M.P Joshi
Counsel for Respondent: Shri Raiv Ranjan
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