Legal principle

Once an Export Obligation Discharge Certificate (EODC) has been issued by the DGFT, it is determinative and deemed to be completion of all export obligations, and customs cannot confirm a duty demand where no evidence to the contrary of actual use of the imported goods has been led.

Court decision

The Tribunal set aside the impugned Order-in-Original and allowed the appeal with consequential relief, deciding in favour of the appellant. It held that the EODCs issued by the DGFT were determinative of completion of the export obligation for all three cars, and therefore the confirmed duty demand of Rs. 76,28,854/- with interest and penalties could not stand.

Facts

M/s Interglobe Enterprises, a tours and travels operator, imported three cars claiming benefit of Notification No. 49/2000 and Notification No. 44/2002 under the EPCG Scheme to render tour and travel services and earn foreign exchange. After EODCs were issued by the DGFT for Licences 1 and 2 (the Licence 3 application was kept pending during DRI investigation, which also led to seizure of the cars under Section 110 of the Customs Act, later released on bank guarantees on Delhi High Court orders), a Show Cause Notice dated 31.08.2006 was issued demanding duty on the imported cars and proposing penalties. The Commissioner of Customs, Tughlakabad, by Order-in-Original No. 02/10 dated 12.01.2010, confirmed a duty demand of Rs. 76,28,854/- along with interest and penalties, against which the present appeal was filed before the CESTAT.

Key provisions

• Section 111(o), Customs Act, 1962 — Confiscation of improperly imported goods etc
• Section 9(4), The Foreign Trade (Development and Regulation) Act, 1992 — Issue, suspension and cancellation of licence.
• Section 5, The Foreign Trade (Development and Regulation) Act, 1992 — Foreign Trade Policy.
• Section 110, Customs Act, 1962 — Seizure of goods, documents and things