EPCG Interest and Penalty waived due to Foce Majeure

The Customs, Excise and Service Tax Appellate Tribunal (CESTAT), New Delhi, held that where an EPCG licence holder was unable to fulfil export obligations due to circumstances beyond its control, including loss of possession of imported capital goods through SARFAESI proceedings and auction by lenders, interest and penalty could not be sustained. 

While the Tribunal upheld the customs duty demand foregone under the EPCG Scheme, it set aside confiscation, interest and penalty, observing that the inability to fulfil export obligations had become an impossibility and was attributable to unforeseen circumstances rather than any deliberate default or mala fide conduct.