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GOVERNMENT OF INDIA. MINISTRY OF COMMERCE & INDUSTRY

OFFICE OF THE JOINT DIRECTOR OF GENERAL OF FOREIGN TRADE6lli FLOOR. RESHAM BHAWAN. LAL OAP:WAJA. SURAT-3II6000

E~ag : dg lkSymlCllnic,lQ Tel: 0261 2.423381Tela iSll: 0261-2452216

F.NO_ 91263/AM15/ECA"

Data: 22.12.2017

Order-In-Original

Any person/party aggrieved by this Order, may under Section 15 of theForeign Trade (Development & Regulation) Act, 1992 file an appeal against thesame to appropriate authority viz. The Additional Director General of Foreign Trade,Mumbai. Appeal shall be flied within 45 days from the date of receipt of thisAdjudication Order and a complete set of evidence In the form of the Annexure 10 theappeal relied upon in support of the appeal.

Any person/party desirous of filing an appeal against this order shall depositthe penalty amount and produce proof of payment of penalty amount along with theaJ)peal to the Appellate Authority failing which the appeal is liable to be rejected fornon-compliance of the provisions of Section 15 of the Foreign Trade (Development &Regulalion) Act. 1992.

The penalty amount Is to be deposIted under the Head of Account' 1453Foreign Trade & Export Promollon Minor Head 102 other receipts, fines andpenalties etc. Import & Export Control Organistion",

Evidence of payment of penalty or appeal Is required to be finished to theAdjudicating Authority within 45 days from the date of service of this AdjudicationOrder, failing which the . Importer Exporter Code ~o. of the person/companies/otherentities concerned is liable to be suspended and penalty amount shall be recoveredas an arrear of land revenue under the provisions of Section 11 (4) of the ForeignTrade (Development & Regulation) Act. 1992 without making any reference to them, .,

A Show Cause Notice No. 9/263/AM15/ECA dated 02.03.2015 under Rule7(1)(c) of Foreign Trade ( Regulation) Rules, 1993 and Section 5 of Foreign Trade (Developmant & Regulatlon) Act. 1992 for suspension of operation again8t EPCGAuthorisation No, 5230012099 dl.04.07.2013 with immediate effect was issuedunder Section 9(4) of the Foreign Trade ( Qevelopment and Regulation) Act, 1992pending finalization of the proceeding for cancellation of the same. An oppoTtunity ofpersonal. hearing was 81$0 granted on 23.03.2015. Neither the personal hearing wasavailed nor the firm submitted any documents as called for by this office. Thenotices firm did nol submit original EPCG licence and Installation certificate as perpara 6.3.1 of Hand Book of Procedures 2009-14. An opportunity of personal hearingwas again gran led on .

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08.09.2015 but the notlcoo firm did not submit the original EPCG Authorization andexport documents for discharge of export obligation nor appeared for personalhearing. The Show cause notice sent to the firm was returned back by the postalauthorities with remarks Not known. .

The cause of the notice arose as it was brought to the notice of this office byDirectorate of Revenue tntelligence, Regional Unit Gurukrupa Building,SangnaSooelty, Rander Road Sural that the noticee firm Mfs.TeJaswanl Creation, PlotNoAO.Jay Gayatri Nagar-2,Navagam,Dlndoll,SuratlGujarat-395003 had imported 8nos of Computerised Embroidery machines under the above said EPCGAuthorisation and sold the same In domestic market.

FACTS OF THE CASE:The notioee firm Mls.Tejaswani Creation, Plot NoAO,Jay Gayatri Nagar-

2,Navagam,Dindoli,SuratlGuJarat-395003 have obtained EPCG Authorisation No.5230012099 date.04.07.2013 for import of B Nos. of Computerised EmbroideJ)'machine Model # 615 & Model # 917 for a duty saved value of Rs.1 052560/- with anobligation to export for an FOB value of RS.6315360/- (US$.106678.37) within aperiod of 6 years from the date of issue of the EPCG authorization. In theirapplication the manufaoturing unit address was Mls,TeJaswani Creation, Plot NO.7-8,NlIkanth Ind.H.Soc.,Nani Bahucharjl,Ved Road,Surat"394004. The Authorisationwas Issued with Actual User condition.

It was brought to the notice of this office by Direclorate of RevenueIntelligence, Regional Unit Gurukrupa Buliding,Sangna Soceity, Rander Road Suralthat the noticee firm M/s.Tejaewani Creation, Plot NoAO,Jay Gayatri Nagar-2.,Navagam,Dindoli,SuratlGujarat·395003 had irnported 6 nos ComputerisedEmbroidery machines under the above said EPCG AuthQrisation for a duly savedvalue of Rs.10, 77,918/- and sold the same in domestic mar1<et.

. -.The application made by the nolicee firm contained the following

declaratlonlunderfaking:

(1). Itwe hereby declare that the particulars and the statements made in thisapplication are true and correct to the best of my/our knowledge and belief andnothing has been conoealed or held therefrom and If proved incorrect or false willrender melus liable for any penal action or other consequences as may beprescribed in law or otherwise warranted.(2). INlle understand to abide. by the provisions of the Foreign Trade(Development & Regulation) Act, 1992, the Rules and Orders framed thereunder, theForeign Trade Policy, the Handbook of Procedures and the ITC (HS) classificationof Export and Import items. .

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(3) l(lNe hereby certify that none of the Proprietorl Partner(s)1Director(s)/KartalTrustee of the firm/company, as the case may be, is/are a

Proprietor/Partner(s)lDlrector(s)/KartalTrustoa in any other firm/Company which

has come to the adverse notice of DGFT

(4) lANe hereby certify that neither the Registered Office/Head Office of thefirm/company nor any of its Branch Office(s)lUnit(s)/Division(s) has beendeclared a defaulter and has otherwise been made ineligible for undertaking

import/export under any of the provisions of the Policy.

( 4 A) INVe hereby certify that our applicant firm/company is NOT currently availing

any benefits under Technological Upgradation Scheme ( TUFS) administered by

Ministry of Textiles, Government of India. (applicable to zero duty EPCG Scheme

onlv)( 4 B ) I/We hereby certify that our applicant firm/company Is NOT availed and shall

not avail the benefits of Status Holdar Incentive Scheme under Para 3.16 of FTP in

the current year (applicable to zero duty EPCG Scheme orlly).11 We hereby declare

that Ifwe have perused the list of SCOMET items as contained in the Appendix 3 tothe Schedule 2 of the ITC (HS) Classincalions of Export-Import Items, 2004-09 and

that Ihe Item(s) exported / proposed to be exported does not fall within this list and

that 1/ We agree to abide by the provisions of the Policy for, export of SCOM~T items

contained in the Foreign Trade Policy, Schedule 2 of ITe (HS) and the Handbook of

Procedures (Vol. 1), irrespective of the scheme under which the item is exported I

proposed to be exported (the underlined portion will be deleted in case anapplication for export license for SCOMET Item Is being filed).

(5) I/We declare that no export proceeds are outstanding beyond the prescribed

period as laid down by the RBI, or such extended period for which RBI permissionhas bean obtained.

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(6) IflNe hereby declare that the capital goods/spares sought for import in the

application are aotually required for use at pre productlonfproduction/post productionstages for the export product(s) or for rendering services for fulfilment of 6Xport

obligation,

(7) IMle hereby declare that in respect of goods for which nexus is not established. at

a latar date, !Nlle shall pay to the Government Customs duty saved together with

15% Interest on such imported goods which are found having no relation with

product exported or service rendered.(8) IflNe hereby declare that in case of import of refurbished/reconditioned spares,

the refurbished/reconditioned spares have a residual life whioh is not less than 80%

of the life of the original spares.

(9) IMle hereby declare that INlle do not come under the purview of Service Tax and

therefore are not registered with the Service Tax Cell of the Jurisdictional CentrelExcise Authorities. (in case of Service Providers who are not covered IJnder servicetax).

(10) l(We hereby declare that tme shall not exceed the S51 investment limit in plant

end machinery after making Imports under the EPCG Authorisation (applicable in

oases of imports made by SSI sector).

(11) I/We hereby declare that the import of capital 'goods shall be used for buildingand operating shopping malls/super markets having al'minimum covered area of

. 1000 sq metres. (applicable in case of Imports made by Rt:llail sector).(12) IMle hereby declare that INlle have not made Imports under the Technological

Upgradation Scheme previously before any licensing authority and the 'present

imports of Capital Goods to be made under this Scheme ( fot shieh this application is

made) are more than 10% of the my/our present investment in the plant and

machinery ( applicable In case of imports under EPCG Technological UpgraclationSchema)

(13) IMla hereby undertake to submit a self certified copy of Drug Manufacturinglicence in case of export of Pharmaceutical Products with a period of three years

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from the date of issue of EPCG AuthoriZation falling which the Bank GuaranteelLegal undertaking executed! furnished at the time of clearance of Capilal Goods withCustoms authorities' Regional Aulhorltles of DGFT as the case may be isliable to be forfeited! Invoked and .INVe would be liable to Customs Duty savedamount together with applicable interest thereon from the date of first Import till thadate of nnal payment.(13 A) I hereby certify that I am authorised to verify and sign this declaration as perParagraph 9.9 of the Policy

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Whereas the said application was registered under file No.52121 1021 10714/AM14 and considered on the basis of declaration/undertaking andits supporting documents by the licensing authorily in terms of Chapter 5 of thepolicy 2009-2014. Accordingly, the EPCG authorization No.5230012099dt.04.07.2013 was Issued with port of registration as ·Sachln ( Surat) ( INSAC6) "with the following condltions:-

I; This Authorization has been issued under Chepter 5 of the Foreign Trade Policy 2009-14and carries an export obligation to make physical exports to GCA countries or to renderservices as ihe case may be, and realize the export proceeds in freely convertible currency.2. The issuance of the Authorizatlon shall be subject to the condilionsiparamelers as laiddown in Chapter 5 of the Foreign Trade Policy 2009·14 and Handbook of Procedure 2009-14.3. This Authorisation will be operative as per the provisions of Foreign Trade Policy andHandbook of Procedure 2009-14 or as per any other law/provlsions for the time being inforce.4. This Authorization shall be utilized inaccordance with the provisions of the Foreign TradePolicy 2009-14 lind the concerned Customs Notification No.1 0312009 dated. 11.09.2009.S. Capital Goods as defined in Para 9.12 (read with PMII. 5.1) of Foreign Trade Policy 2009-14, only shall be allowed for imports/domestic procurement against this Authorizadon,

6, The AuthorizationHolder shallbe UDder obligation to Export Item asper details given below: III"SR. ITCHS Export Item Name

CODB01 5407]039 SYNTHETIC!RAYON FABRICS wrrn EMBROIDERY

,EMBROIDERED TEXTILES02. 63071020 OTHBR EMBROIDERY MADE UP ARTICLES INCLUDING DRESS

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11161117. The Export Obligation shall be worth US$.106678.37 i.e, 6 times of the duty saved on importof Capital Goods on FOB basis within II period of 6 years (Block Year J st to 4th year - SO% and5th to 61h year - 50%) reckoned from fhe date of issue of this Authorization. The Authorizationholder shall furnish proof of exports within 90 days of completion of each block.S. EKport Obligation shall be fuUfilled by Ihe authorisation holder through export of goods whichare manufactured by him or his supporting manufacturer / Services rendered by him, for whichrhe EPCG authorisarion has been granted,9. Authorization Holder shall also be required to maintain Average Level of Exports achieved in

. the preceding three licensing years for the same and similar products mentioned in Para 6 above.The annual average of the past export performance to be maintained by the Authorization Holderis Rs. 0.00.I O.The Aulhorizalion Holder may discharge the export obligation by way of direct exports as wellas through third party exports. EPCG Authorisation number and date shall be mentioned on allexport documents of shipments pertaining to EO fulfillment of the EPCG Authorlsatlon,

11. The Authorization holder shan have to fulfil export obligation as per Para 5.5 of ForeignTrade Polioy read with Para 5.7 of the Handbook of Peoecduro 2009-14_12. In case, authorization holder has SUpporting manufacturer(s), the name of the supportingmanufacturer(s) shall also be indicated in Shipping Bills.13. ImportlProcurement of capital goods under this authorization shall be subject to Actual UserCondition.14. Import/procurement of second hand capital goods are nol allowed under EPCG Authorization.15. The qapital Goods at.e.to. be. installed at. the followj:n.g address;II~a.~~~_II!I_~.~~~~~~~_~!~~~S\1)lIl.o.~!Il~Mllnu.!~e.turer m • .. _ "j

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16.The Authorjzation holder shall subaut Installatlon Certificate to the Regional Aulhori~y within6 momhs from the dale of completion of imports/domestic procurement against the subjectAutborization. r,.,71-

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17. In case of import of Spares, the Iostallstion Certificate shaH be submitted by the Authorizationholder within a period of 3 years from the date of import/domestic procurement (P!lI1l5.3.1 (b) ofHBP,2009·14). .18. Besides the above conditions, the issueof Authorization shall be subject 10 all other relevanteonditions/parameters of Foreign Trade Policy and Handbook of Procedure (2009-19). Anyviolation of this, shall be subject to penal action as envisaged in FTPIHBP and FT(D&R).Acl

FINDINGS'The notioee firm has been given sufficient opportunity to explain their case in

person, but they have not cared to come forward with proper justification for theiraction. Hence, it is revealed that the noticee had a clear rnensrea right from thepoint of making of application to obtain EPCG Authorisation by mlsdeclaration Inviolation of the Rule 14 of the Foreign Trade (Regulation) Rules, 1993. These actsof the noticee call for action under Rule 10 of the Foreign Trade (Regulation) Rule,1993. I, therefore, in exercise of powers vested in me under Section 13 of theForeign Trade (Development & Regulatlon), Act 1992 make follOWing order byInlloking Section 9(4) and SectIon 11 (2) of the Foreign Trade (Development &Regulation) Acl,1992.

ORDER:-

I impose a fiscal penalty of RS.32,33,754/- ( Rupees.Thirty Two Lakh ThirtyThree Thousand Seven Hundred Fifty Four only) on the llnn and its Proprietor. Theyare collectively and severally liable to deposit the said penalty amount.

This Order is issued without prejudice to any ottie~Jlction that may be takenunder any other Act, Rules or Regulations in force.

( Abhimaniu Sharma )Dy. Director General of Foreign Trade .

. Copyto:-1. MIs.Tejaswanl Creation,Plot No.40;Jay Gayatri Nagar-2,Navagam,Dindoli,Surat-

394210.2. Shrl.Ramkrushna Vana Shirsath, 40,Jay Gayatri Nagar-2,Navagam,Dindoli,Surat-

394210. .3. Factory address: MIs. Tejaswani Creation,Nanl 8ahucharji,Ved Raod,Surat-3950044. Additional Director General of Foreign Trade, New Delhi for Information.5. Addl. OGFT, Mumbai,Joint DGFT, Ahmedabad.Vadodara, Pune, Rajkot,

Bhopal' Goa .6. All the Custom Authority.