2013 (9) TMI 64 - AT - Customs

Tribunal upholds duty demand with interest, penalty set aside.

GODREJ & BOYCE MFG. CO. LTD. Versus COMMISSIONER OF CUS. (EXPORT), MUMBAI

GODREJ & BOYCE MFG. CO. LTD. Versus COMMISSIONER OF CUS. (EXPORT), MUMBAI - 2013 (293) E.L.T. 46 (Tri. - Mumbai) Issues Involved:1. Whether the demand raised in the show cause notice is time-barred.2. Whether the reversal of credit amounts to non-availment of credit.3. Validity and binding nature of the certificate issued by the jurisdictional Range Superintendent.4. Applicability of the 1997 circular at the time of reversal of credit in 1995.5. Adequacy of the reconciliation statement correlating the reversal of input stage credit with the shipping bills.6. Requirement of showing particulars of reversal as per the Amnesty scheme.7. Interest payment on Modvat credit and its timing.8. Imposition of penalty under Section 112 of the Customs Act.Detailed Analysis:1. Time-barred Demand:The appellant argued that the demand raised in the show cause notice dated 20-6-1998 is time-barred as the Modvat credit was reversed on 12-7-1995. They relied on the Tribunal's decision in AMC Coated Fabrics Pvt. Ltd., which was upheld by the High Court of Bombay. However, the Tribunal found that since the exports were undertaken in 1992-93 and imports in April 1994, the appellant's declaration at the time of import that no input stage credit was availed was false. Thus, the demand was not considered time-barred.2. Reversal of Credit:The appellant contended that the reversal of credit amounts to non-availment of credit, citing decisions in Chandrapur Magnet Wires (P) Ltd. and Hellow Mineral Water (P) Ltd. The Tribunal, however, noted that the appellant's reversal of credit in 1995, after the exports in 1992-93, did not satisfy the condition of non-availment of credit at the time of export. The Tribunal referred to the Cheviot Company Ltd. case, holding that subsequent reversal does not equate to non-availment of credit.3. Certificate Issued by Range Superintendent:The appellant submitted a certificate from the jurisdictional Range Superintendent showing the reversal of credit. The adjudicating authority rejected this certificate, stating it was issued eight years after the exports and did not correlate with the shipping bills. The Tribunal upheld this rejection, noting the certificate lacked details necessary for verification.4. Applicability of 1997 Circular:The appellant argued that the 1997 circular was not applicable as the reversal occurred in 1995. The Tribunal dismissed this argument, stating that the appellant's reversal did not meet the conditions of the Amnesty Scheme introduced in 1997, which required interest payment by 31-1-1997.5. Reconciliation Statement:The appellant's reconciliation statement was found inadequate as it did not correlate the credit reversed with the shipping bills. The Tribunal noted that the appellant failed to provide satisfactory documentary evidence to support their claims.6. Particulars of Reversal as per Amnesty Scheme:The Tribunal observed that the appellant did not pay the interest by 31-1-1997 as required by the Amnesty Scheme. The interest was paid only in June 2000, violating the scheme's terms.7. Interest Payment on Modvat Credit:The appellant claimed there was no provision for interest payment at the time of reversal in 1995. The Tribunal rejected this, stating that the interest payment was a condition under the Amnesty Scheme, which the appellant failed to meet.8. Imposition of Penalty:The Tribunal set aside the penalty imposed under Section 112 of the Customs Act. It noted that for a penalty to be imposed, goods must be liable for confiscation under Section 111, which was neither proposed in the show cause notice nor found in the impugned order.Conclusion:The Tribunal upheld the demand of duty amounting to Rs. 11,71,180.60 along with interest at 24% p.a. However, it set aside the penalty imposed under Section 112 of the Customs Act. The appeal was disposed of accordingly.