Full Judgment
2. As per facts on record respondents obtained EPCG licence for import of capita] goods with an obligation to export the final product within a period of 5 years. The capital goods were imported at concessional rate of duty and the respondents fulfilled the export obligation for the first three years. However, subsequently they were not in a position to fulfil the export obligation and applied to DGFT authorities for opting out of EPCG Scheme. Permission was granted by the said authorities to opt out of the said scheme on payment of Customs duty + interest at the rate of 24%. Such permission was granted on 9-8-1999. In pursuance to the said permission respondents paid Customs duty of around Rs. 2.70 crores (Approximately) and an amount of Rs. 38.73 lakhs (Approximately) towards interest. The above calculation of duty was made taking into consideration the partial export obligation fulfilled in the first 3 years.
3. However, vide show cause notice dated 21-12-1999, Revenue raised duty demand of Rs. 2,94,54,986/- along with interest and proposal to confiscate the goods and to impose penalty. The said show cause notice was adjudicated by the Commissioner wherein he confirms proportionate duty of Customs to the extent of Rs. 2,65,80,178/- and interest amounting to Rs. 49,58,817/- by giving proportionate benefit of export obligation. The said order of Commissioner is impugned before us.
4. There is no dispute on facts. The respondents have admittedly fulfilled the export obligation for the 2nd and 3rd year of import which was to the extent of 10% and 20%, first year carrying nil export obligation. It is only in the 4th and 5 th years that the respondents defaulted and approached DGFT for coming out of the scheme. They were ready to pay the Customs duties. As such, the only question, which remains to be decided in the present appeal, is as to whether the benefit of export made by the importers in the 2nd and 3rd year has to be extended to them, while calculating the Customs duty required to be paid in respect of the imported capital goods. The ld. Advocate Shri V.S. Nankani appearing for the respondents have relied upon the Tribunal's decision in the case of jayaswals Neco Ltd. v. Commissioner of Customs, Visakhapatnam . Para 4 of the said order reads as under: The appellants have claimed that they have made some exports and hence, the duty demands on imported LAM Coke should be proportionately reduced. We find that the relevant Notification No. 30/97, dated 14-97 makes no such concession. It requires export obligation in full. This is settled law that notifications must be strictly interpreted. However, we find that in the case of another export promotion scheme namely the EPCG Scheme, Board's letter F. No. 67/14/2000/DBK, dated 13-3-2000 allows payment of differential duty and interest only in respect of unfulfilled portion of export obligation. Taking into account the said circular, we are of the view that it would be just and proper to allow the appellants to produce necessary proof regarding partial exports made by them and to charge only the differential duty and interest from them in respect of unfulfilled portion of the export obligation by allowing proportionate reduction.
5. As against the above declaration of law by the Tribunal, ld. DR has not been able to show us any contrary decision. In fact we find that the above decision relies upon the Board's own circular allowing payment of duty and interest only in respect of unfulfilled portion of export obligation. The Revenue cannot argue against their own circulars issuing clarifications. As such, we find no infirmity in the view taken by the adjudicating authority and reject the appeal filed by the Revenue.