Deemed credit exclusion requires proof of intent to evade duty; mere procedural lapse is not enough.

Benefit of deemed credit under Notification No. 6/2002-C.E. (N.T.) is excluded only where non-payment or short payment is shown to arise from fraud, collusion, wilful misstatement, suppression of facts, or contravention with intent to evade duty. On the stated facts, clearance was under CT(3) certificates, rewarehousing certificates were not produced within time, and duty was later paid with interest within three months. The record disclosed no deliberate intention to evade duty, and mere procedural non-compliance or failure to export goods did not itself establish the requisite mens rea. The Revenue's objection to deemed credit therefore failed.

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Issues: Whether para 6 of Notification No. 6/2002-C.E. (N.T.) was attracted so as to deny the benefit of deemed credit on the ground that duty was not paid in cash with intent to evade payment of duty.

Analysis: The notification permits deemed credit, but its benefit is excluded where non-payment or short payment occurs by reason of fraud, collusion, wilful mis-statement, suppression of facts, or contravention with intent to evade duty. On the facts, the record showed only that the clearance was made under CT(3) certificates, rewarehousing certificates were not produced within the stipulated time, and duty was thereafter paid within three months along with interest. There was no evidence of any deliberate intention to evade duty, and mere failure to produce the certificates or the fact that the goods were not exported did not by itself establish the requisite mens rea.

Conclusion: Para 6 of the notification was not attracted, and the Revenue's challenge to the availment of deemed credit failed.

Ratio Decidendi: Exclusion from the benefit of a duty concession or deemed credit on the ground of contravention requires proof of intent to evade duty; mere procedural non-compliance, without evidence of such intent, is insufficient.

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