F.NO.9126B/AM15/ECA Date: 22.12.2017

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GOVERNMENT OF INDIAMINISTRY OF COMMERCE & INDUSTRY

OFFICE OF THE JOINT DIRECTOR OF GENERAL OF FOREIGN TRADE6TH FLOOR. RESHAM BHAWAN. LAL DARWAJA, SURAT·395003

E·me" ; dgfl-sU!a!@nic,jo Tel ; 0261 2423381Tele lax : 0261-2452216

Order-in-Original

Any person/party aggrieved by this Order, may under ~ection 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 shan be filed within 45 days from the date of receipt of thisAdjudication Order and a complete set of eVidencein the form of the Annexure to 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 .theappeal 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 (Deveiopment &Regulation) Act, 1992.

The penalty amount is to be deposited under the Head of Account· 1453Foreign Trade & Export Promotion Minor Head 102 other receipts, fines and'penaltieSetc. Import & Export Control Organistion".

Evidence or payment of penalty or appeal is required to be finished to theAdjudicating Authority within 45 days from the date of S9JViceof this AdjudicationOrder, falling which the Importer Exporter Code No. of the person/companies/otherentities concerned is liable to be suspended and penalty amount shall be recoveredas an arrear of land revenue under the prOVisionsof Section 11 (4) of the ForeignTrade (Development & Regulation) Act, 1992without ma~ing any reference to them.

A Show Cause Notice No_ 91268/AM15/ECA dated 20.08.2014 under Rule7(1)(c) Of Foreign Trade ( Regulation) Rules, 1993 and Section 9 of Foreign Trade (Development & Regulation) Act, 1992 for suspension of operation against EPCGAulhorlsalion No. 5230011202 dt, 12.02.2013 with immediate effect was issuedunder Seclion 9(4) of the Foreign Trade ( Oev~lopment and Regulation) Act, 1992pending finalization of the proceeding for cancellation of the same. An opportunity of

. personal.hearing was also granted.on 05.09.2014. Neither the personal hearing wasavailed nor the firm submitted any documents. as called £0' by this office. Thenoticee firm did -not submil original EPCG licence and Installation certificate as perpara 5.3.1 of Hand Book of Procedures 2009-14. An opportunity of personal hearingwas again granted'on .

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09.09.2015. They did not submit any export documents for discharge of exportobligation nor appeared for personal hearing. The Show cause notice sent to thefirm was returned back by the poslal authorities with remarks Not known.

The cause of the notice arose as it was brought to the notice of this office byDirectorate of Revenue Intelligence, Regional Unit Gurukrupa Building,SangnaSoceity, Rander Road Sural that Ihe noticee firm M/a.Goodluck Creatlon,protNo.254,flagirathnagar-2.L.H.Roacl,Nr.Maruti Chowk,Sural-395006 had imported 15nos of Computerised Embroidery machines under the above said EPCGAuthorisation and sold the same In domestic mat1<et.

-FACTS OF THE CASE:

The noticee firm M/s.Goodluck Creation,Plol No.254,Hagirathnagar-2.L.H.Road,Nr.Maruti Chowk,Surat-395006 have obtained EPCG Authorisation No.5230011202 date.12.02.2013 for import of 15 Nos. of Computerised Embroiderymachine' Model # 615 for a duty saved value of Rs.1563061/- with an obligation toexport for an FOB value of RS.12504488/- (US$.226325.57) within a period of 8years from the date of lssuo of the EPCG authorization. In their application themanufacturing urrt address was Mls.Goodluck Creation,Plot No.54, JaybhavaniInd.Esale,Magob,Surat-395010. The Authorisation was issued with Actual Usercondition.

. It..was brought to the notice. of this office by. Directorate of RevenueIntelligence, Regional Unit Gurukrupa Building.Sangna S~ity. Render Road Suratthat· the noticee firm Mle.Goodluck Creatlon,Plot No.254,Hagirathnagar-2,L.H.Road,Nr.Marutl Chowk,Surat-395006 had imported 15 nos Computerised'Embroldery machines under the above said EPCG .Authorlsation for a duly savedvalue of Rs.1478470/- and sold the same in domestic m.arket.

The applicallon made by the noticee firm·. contained the followingdeclaration/undertaking: . .

(1). IMie 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 concealed or held therefrom and if proved incorrect or false wiilrender me/us liable for any penal action or other' consequences as may bepresqibed in law or otherwise warranted. . .(2). IMie 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) IflNe hereby certify that none of the ProprietorJ Partner(s)/

Dlredor(s)/KartafTrustee of the firm/company, as ttie case may be, is/are a

ProprletorfPartner(s)/Director(s)lKartafTrus1ee In any other. firm/Company whlch.

has corne to the adverse notice of DGFT.

(4) INoie hereby certify that neither the Registered OfficeJHead Office of the

firm/company nor any of its Branctl Offlce(s)lUnlt(s)JDivision(s) has been

declared a defaulter and has olilerwlse been made ineligible for undertaking

import/export under any of the provisions of Iile 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

only)

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

not avail the benefits of Status Holder Incentiye Scheme under Para 3.16 of FTP in

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

that ~. have perused the list of SCOMET items as contained in the Appendix 3 to

.the Sclledule·2 of the rTe (HS) Classifications oi Export-Import Items, 2004-09 and

that the item(s) exported I proposed to be exported does not fall within this list and

.th.a~1/ We agree to.abide by the provislons of Ihe Polley for export of SCOMET items

contained in Ihe Foreign Trade Policy, Sch~ule 2 of ITC (HS) and the Handbook of. "

. Procedures (Vol. 1), irrespective of the scheme under which the item is exported Iproposed to be exported (the underiined portion will be deleted in case an

application for export license for SCOMET item is baing filed).

(5) IMle declare that no export proceeds are outstanding beyond the prescribed

. period as laid down by the RBI, or such extended period for which RBI permission

has· been obtained.

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-4-(6) WJe hereby declare that the capital goodslspares sought for Import In theapplication are actually required for use at pre productionlproduction/post production

stages for the export producus) or for rendering services for fulfilment of export

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

a later date. If:Ne shall pay to the Govemment Customs duty saved together with15% interest on such imported goods which are found having no relation with

product exported or service rendered .

. .(8) !/Vlle hereby declare that in case of Import of refurblshEldireconditioned -spares,the refurbished/reconditioned· spares have a residual life which is not less than 80%

of the life of the original spares.

(9) INoie hereby declare that ItWe do not come under the purview of Service Tax andtherefore are not registered with the Service Tax Cell of the jurisdictional Central

Excise Authonties. (in case of Service Providers who are not covered under service

tax).

(10) ItWe hereby declare that INVe shall not exceed the SSI investment limit in plant

and machinery after making imports under the EPCG Authorisation (applicable in

cases of Imports made by SSI sector).(11) lIWe hereby declare that the import of cap~1 goods shall be used for building

and operating shopping malls/super markels having"~ minimum covered area of1000 sq metres. (applicable in case of Imports. made by Retail se~or).

(12) IMJe hereby cieclare that IMJe have not made imports under the Technological

Upgradalion Scheme previously before any licensing authority and the present

imports of Capital Goods to be made under this Scheme ( for shieh this application ismade) are more 'than 10% of the my/our present investment in the plant and

machinery ( applicable in case of imports under EPCG Technological UpgradationScheme i(13) INVe 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 GuaranteeJ

Legal undertaking executed! furnished at the time of clearance of Capital Goods withCustoms authorities J Regional Authorities of DGFT as the case may be Is

liable fei' be forfeitedl invoked and lNoIe would be liable to Customs Duty savedamount together with applicable interest thereon from the date of first import till the

· da1e of final payment.(13 A) I hereby certify that I am authorised to verify and sign this declaration as per

Paragraph s.s of the Policy

Whereas the said application was registered under file No.· ·521211021/0976/AM13 and considered on the basis of declaration/undertaking and.

ils supporting documents by the licensing authority in terms of Chapter 5 of thepolicy 2009-2014. Accordingly, lhe EPCG authorization NO.5230011202dt,12.02.2013 was issued with port of registration as ·Sachln ( Surat) ( INSAC6) •

. with the following conditions:-

I. This Authorization hils been issued under Chapter 5 of the Foreign Trade Policy 2009-14and carries an export obligation to make physical exports to GCA countries or-to renderservices. as the case may be, and realize the export proceeds in freely convertible currency ..2. The issuance of the Authorization shall be subject to the oondilionslpanuneters as IBiddown 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 my other lawlproVlsioWl for the time being inforce,4. This Authorization shall be utilized in accordance with the provisions of the FOI:CignTradePoUcy'2009-14 and the concerned Customs Notlflcanon No.10J12009 dated: 11.09.2009.5. Capital Goods as aefmed in Para 9.12 (read with Para 5.1) of Foreign Trade Policy 2009-

· 14. only shall be anowed for imports/domestic procurement against this Authorizlltion .. 6. The Authorizntion Holder shall be under obligation to Export Item lIS per derails given below:

SR. ITCHS Export Item NameCODE

01 . 54071039 SYNTHETIC/RAYON FABRICS WITH EMBROIDBRY,F.MBR01DEIUlD TEXTILES

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7. The Export Obligation shall be worth USS 226325.57' i.e. 8 times of the dutysaved on importof Capital Goods on FOB basis within a period: of 8 years (Block Year lst 10 6th year - 50% and7lh to 8th year - 50%) reckoned from the dale of issue of this Authorization ..The Authorizationholder ~ furnish proof of exports within 90 clays of completion of each block.8. Export Obligation shall be fullfllled by the authorisation holder through export of goods whichare IIlMufaciUl.'l:d by him or his supporting manufacturer I Services rendered by him, for whichthe EPCG authorisation has been granted,9. Authorizalion Holder shall also be required to maintain Average Level of Exports achieved inthe.pre,cedUig three licensing years for the same and similar Products mentioned in Para 6 above.The annual average of Ihe past export performance 10 be maintained by the Authorization Holderis IU..0.00.10.The Authorization Holder may discharge the export obligation by way of direct exports lIS wellas. through third party exports. EPCO Authorisation number and date shall be mentioned on allexport documents of shipments pertaining to EO fulfillment of the EPCG Authorisation.

11.. The Aulhorizatioll holder shall have to fulfil export obligation lIS pet Para 5.5 of ForeignTrade Policy read wi th Para 5.7 of the Handbook of Procedure 2009·14.12. In case, alithori7.fliit,!Dholder has supportmg manufacturer(s), the name of the supportingmanutaeturens) shall also be indicated in Shipping Bills.13. Import/Procurement of capital goods under thisauthorization shall be subject to Actual UserCondition.14. Import/procurernent of second hand capital goods arc not allowed under EPCG Authorization.

IS. The .~_a.Ei!~I..G.~~~~_al'~!.~.~~.in~~~..~:l.hefollo_'Y~i'~~: '",,,,",,,,,,,',,,':,""H'." _ ...... " .... "

INaD!e~~_A~~~~s.~~.t!~~n~~~pl,"~~,~~.I;.~~!'.~~~c~.II:-:e~"..: _. . _ AW",_". ••• I

S1.~~~:DCU~~f,::::BHA:AN! ~!:I:.:~:;~:p·m...~... .jC~TI?!,'J I~.I?.'.~S.TA~~.~AGO'J3,.S.~:r.}9501o.lEJ 8..~0?9. i~.~:~.1_.201316. The Authorizatlon holder shall submit Installation Certificate to the Regional Authority within6 months from the date of completion of imports/domestic procurement against the subject .Authorization. .17. InC8SO of import of Spares, the lnstallotion Certlflcate shall be submitted by the Authorizationholder within a period of 3 years from the date ofimportldomestic procurement (para 5.3.1 (b) of

·HBP,2009-14). .. 18. Besides the above conditions, the issue of Authorization shall be subject to all other relevant

ecnditions/parameters of Foreign Trade. Policy and Handbook of Procedure (2009-19). Any. violation of this, shall be subject to penal action as envisaged io FfPIHBP and FT(D&R) Act .

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FINDINGSThe noticee firm has been given sufficient opportunity to explain lhelr 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 mensrea right from thepoint of making of application to obtain EPCG Authorisation by misdeclaration inviolation of the Rule 14 of the Foreign Trade (Regulation) Rules, 1993. These actsof the notices call for action under Rula 10 of the Foreign Trade (Regulation) Rule,1993. I, therefore, in exercise of powers vested in me under Section 13 of theForeign Trade (Development & Regulation), Act 1992 make followillg order byinvoking Section 9(4) and Section 11(2) of the FOieign Trade (Development &Regulation) Act,1992.ORDER:-

I impose a fiscal penalty of Rs.44,35,410/- ( Rupees.Forty Four lakh ThirtyFive Thousand Four Hundred Ten only) on the firm and its Proprietor. They arecollectively and severally liable to deposit the said penalty amount.

This Order is issued without prejudice to any other action that may be takenunder any other Act, Rules or Regulations in force. N/'rvrz;

. ( Abhimanlu Sharma )01'. Director General of Foreign Trade.

Copyto:-1. Mis. Goodluck Creatlon,Plot.254,Bhaglralh Nagar-2,L.H. Road, Nr.Maruli Chowk,Sural

I Gujarat-395006.. . .2, Factory address: MIs. Goodluck Creation,54,Jay BhavaniInd.Estate.Magob.Sural-

395010 ..3, Shri Suresh Singh Tej Singh, Plot No.254,Bhaglralhn!Jgar-2,L.H.Road,Nr.Maruli

Chowk,Sural395006. .4. Additional Director General of Foreign Trade, New Delhi for information.S. Addl. DGFT, Mumbai,Joint DGFT, Ahmedabad.Vadodara, Pune, .Rajkot,

Bhopal/Goa6. All the Custom AuthOrity.

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