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of <h1>Appellant denied duty exemption for breaching Notification 40/2006-Cus. Short receipt quantity demand upheld. Appeals dismissed.</h1> <h3>M/s Saurashtra Cement Limited Versus C.C. Jamnagar (Prev.)</h3> M/s Saurashtra Cement Limited Versus C.C. Jamnagar (Prev.) - 2019 (370) E.L.T. 1101 (Tri. - Ahmd.) Issues Involved:1. Eligibility for duty exemption under Notification 40/2006-Cus.2. Shortage of imported goods and its implications.3. Applicability of previous judgments and notifications.4. Compliance with conditions stipulated in Notification 40/2006-Cus.Issue-wise Detailed Analysis:1. Eligibility for Duty Exemption under Notification 40/2006-Cus:The appellant imported 49874.000 MTs of 'Steam (Non-Coking) Coal' under the Duty Free Import Authorization (DFIA) Scheme. Out of this, 46933.950 MTs were cleared availing duty exemption under Notification 40/2006-Cus. The central issue was whether the appellant was eligible for this exemption, given that they availed cenvat credit facilities, thereby violating condition 5 of the Notification. The adjudicating authority confirmed a duty liability of Rs. 2,63,834/- along with interest under Sections 28(2) and 28AB of the Customs Act, 1962. A penalty equal to the duty amount was also imposed under Section 114A of the Customs Act. The Commissioner (Appeals) upheld the demand but set aside the penalty.2. Shortage of Imported Goods and Its Implications:The appellant argued that the shortage of 997.340 MTs out of the total imported quantity was due to transit loss and should be permissible. They cited previous judgments, including the Supreme Court's ruling in BPL Display Devices Ltd., which held that exemption cannot be denied on the ground that the goods were notified 'for use' and not actually used. However, the Tribunal found that the shortage was substantial (more than 1.5%) and not negligible, thus not covered by the cited judgments.3. Applicability of Previous Judgments and Notifications:The appellant cited various judgments to support their case, including those in Jhoonjhunwala Vanaspati Ltd. and Suraj Industries Ltd. However, the Tribunal distinguished these cases, noting that the conditions in Notification 40/2006-Cus were more stringent compared to Notification 13/1997-Cus. The Tribunal emphasized that the conditions in Notification 40/2006-Cus required strict compliance, including the submission of an end-use certificate from the jurisdictional Excise Officer, which the appellant failed to provide.4. Compliance with Conditions Stipulated in Notification 40/2006-Cus:The Tribunal highlighted that the conditions under Notification 40/2006-Cus were mandatory and included the requirement to execute a bond and submit an end-use certificate. The appellant's failure to comply with these substantive conditions rendered them ineligible for the exemption. The Tribunal referred to the Supreme Court's ruling in Mangalore Chemicals & Fertilizers Ltd., which held that substantive conditions for exemption must be scrupulously followed.Conclusion:The Tribunal concluded that the appellant violated the conditions of Notification 40/2006-Cus and was not entitled to the duty exemption. The demand for the short receipt quantity was upheld, and the appeals were dismissed.Pronouncement:The judgment was pronounced in the open court on 22.06.2018.
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