Case law

Madras High Court · 19 Feb 2025

M/S.asianet Satellite Communication Limited, Now Represented By Its Senior Vice President vs The Customs And Central Excise

Legal principle

Where an EPCG licence period stands extended and export realisations for the extended period are supported by documentary evidence such as bank certificates, the Settlement/adjudicating authority must consider them and confine the duty liability proportionately to the unfulfilled portion of the export obligation.

Court decision

The writ appeal was partly allowed in favour of the appellant: the portion of the order fixing the export obligation as achieved at only 14% was set aside, and the matter was remanded to the Settlement Commission solely to ascertain the actual export obligation achieved from NRE-account remittances towards cable subscription charges in the three banks (Federal Bank, Indian Overseas Bank, State Bank of Travancore), on the appellant filing bank statements; proportionate duty for the unfulfilled obligation is to be paid as directed by the Commission, failing which DGFT may realise the bank guarantee, which must be kept alive till the proceedings conclude, with the entire exercise to be completed within three months and no order as to costs.

Facts

M/s.Asianet Satellite Communication Ltd (ASCL), a cable TV service provider, imported cable TV equipment worth about Rs.6.14 crores at concessional duty under an EPCG licence issued by DGFT on 23.12.1993 against an export obligation (reduced to US$ 77,89,491 and extended to 22.12.1999), secured by a bank guarantee of Rs.3,90,55,765/-. On its failure to fulfil the export obligation, DRI seized the imported capital goods on 29.05.2000 and Customs issued show cause notices dated 30.06.2000 for differential duty. ASCL applied to the Customs and Central Excise Settlement Commission, which by final order dated 13.08.2002 fixed duty liability at Rs.4,63,46,499/- (balance Rs.1,94,00,860/- after Rs.2,69,45,639/- paid), held the export obligation achieved only 14% (exports up to 30.06.1998), granted immunity from fine, penalty, prosecution and interest, and directed release of the seized goods. The single judge by common order dated 23.02.2011 dismissed both sides' writ petitions upholding the Commission, and ASCL alone appealed.

Key provisions