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2025 Supreme(Mad) 3482
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Anita Sumanth, G.Arul Murugan, JJ.
M/s.Asianet Satellite Communication Limited - Petitioner
versus
The Customs and Central Excise Settlement Commission and ors. - Respondents
W.A.No.683 of 2011 and M.P.No.1 of 2011
Decided On : 19-02-2025
Advocate Appeared:
For the Appellant : Mr. Hari Radhakrishnan
For the Respondent: Mr. Rajnish Pathiyil, Senior Panel Counsel
The Settlement Commission must consider all relevant evidence, including remittances from NRE accounts, to determine the actual export obligation achieved under the EPCG Scheme.
Headnote:(A) Export Import Policy - EPCG Scheme - Customs Act, 1962 - Section 127B - The appellant, a service provider, challenged the dismissal of their writ petition regarding the fulfillment of export obligations under the EPCG licence. The DGFT had reduced the export obligation and extended the period, but the appellant failed to comply fully. The Settlement Commission concluded that only 14% of the obligation was met, rejecting claims for the extended period. (Paras 2-36)
(B) Judicial Review - The court emphasized that the Settlement Commission must consider all relevant evidence, including remittances from NRE accounts, to determine the actual export obligation achieved. The matter was remanded for further examination. (Paras 34-36)
Facts of the case:
The appellant was granted an EPCG licence for importing equipment with an export obligation. They imported less than permitted and failed to meet the export obligations, leading to the seizure of goods and subsequent legal challenges.
Findings of Court:
The court found that the Settlement Commission did not adequately consider evidence of remittances received from NRE accounts and remanded the case for further review.
Issues: The main issues were whether the appellant fulfilled the export obligation and if the Settlement Commission properly considered all evidence.
Ratio Decidendi: The court ruled that the Settlement Commission must evaluate all relevant evidence, including remittances from NRE accounts, to ascertain the actual export obligation achieved.
Result: Writ Appeal partly allowed.
| Table of Content |
|---|
| 1. epcg licence and obligations (Para 3) |
| 2. reduction of licence value (Para 4 , 5 , 6) |
| 3. settlement commission's order (Para 7 , 8 , 9 , 10 , 11) |
| 4. appellant's claim for exemption (Para 12 , 13 , 14) |
| 5. respondents' contention (Para 15) |
| 6. consideration of evidence (Para 16 , 17) |
| 7. details of export obligations (Para 18) |
| 8. dgft's communications (Para 19) |
| 9. verification of export obligations (Para 20 , 21 , 22 , 23 , 24 , 25 , 26 , 27 , 28 , 29) |
| 10. remand for further consideration (Para 30 , 31 , 32 , 33 , 34 , 35 , 36) |
| 11. writ appeal outcome (Para 37) |
JUDGMENT :
G. ARUL MURUGAN, J.
The appellant had preferred the intra-court appeal challenging the order dated 23.02.2011 in W.P.No.7931 of 2006(T).
2. The short facts to be noted in the appeal is that M/s.Asianet Satellite Communication Limited [hereinafter referred to as “ASCL”] the appellant herein is a service provider company in television network. The Export Import Policy [in short “EXIM policy”] for the period 1992-97 provided for an Export Promotion Capital Goods Scheme [in short “EPCG Scheme”] under Chapter VI A for the service sector. As per the scheme, the appellant was entitled for either concessional import or total exemption from payment of duty corresponding to the export obligation.
3. On their application, the Director General of Foreign Trade [in short “DGFT”] had issued the EPCG licence on 23.12.1993 in favour of the appellant for import of cable TV equipments valued at Rs.9,79,51,255/- at the concessional rate of duty. The licence fixed an export obligation on the appellant at US$ 1,24,18,543 to be achieved within a period of 5 years from the date of issuance of the licence and towards the security for due performance of the export obligation, the appellant had furnished a bank guarantee to the tune of Rs.3,90,55,765/-.
4. Even though as per the EPCG licence, the appellant was permitted to import equipments to the value of Rs.9,79,51,255/-, the appellant had actually imported equipments worth only Rs.6,14,39,613/-. Taking that into account, the DGFT by order dated 28.12.1998 had reduced the value of licence from Rs.9,79,51,255/- to Rs.6,14,39,613/- and correspondingly the export obligation also was reduced from US$ 1,24,18,542 to US$ 77,89,491. The period of export obligation was also extended by one year. As such, though the period of 5 years as per the EPCG licence expired on 23.12.1998, the export obligation period stood extended by one year from 23.12.1998 to 23.12.1999.
5. There had been at least two extensions for fulfilling the export obligations issued by the DGFT and admittedly the appellant company had not availed the extension by fulfilling the conditions thereunder. As the appellant failed to fulfil the export obligation under the licence, the Director of Revenue Intelligence (DRI) seized the capital goods imported by the appellant under the EPCG Scheme on 29.05.2000. The seizure was challenged before the Kerala High Court in O.P.No.12798 of 2000. As the DGFT proceeded to invoke the bank guarantee, the appellant had filed another petition in O.P. No.15605 of 2000 before the Kerala High Court. The OP was admitted and by order dated 05.06.2000, the invocation of bank guarantee was stayed.
6. Pursuant to which, the Customs Department had issued show cause notices dated 30.06.2000 to the appellant as to why the differential duty for the goods imported should not be realised. As against the show cause notices, the appellant had approached the first respondent Settlement Commission. In the meantime by order dated 28.11.2000, O.P. No.15605 of 2000 was disposed of by the Kerala High Court recording that since the issue is pending before the Settlement Commission, no coercive proceedings need be taken but the bank guarantee should be kept alive.
7. The Settlement Commission by admission order dated 26.12.2000 had directed the appellant to pay the admitted duty liability and based on which the appellant had paid a sum of Rs.2,69,45,640/- on 27.02.2001. B
