2000 (3) TMI 670

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....in terms of advance licence issued to the appellant. The customs authorities after the scrutiny required by law and their own procedure, accepted the licence as covering import of the goods and consequently allowed clearance without payment of duty in terms of Notification 203/92. The goods were cleared on bill of entry filed in October 1994. 3. Consequently the notice was issued under Section 114A and 112 of the Act on the ground that "it appear that modvat credit had been availed of" in the manufacture of the export product, and therefore the condition in paragraph (V) of the notification that no such credit should have been availed of, had not been complied with. The notice therefore proposed recovery of duty foregone on the consig....

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....im was made, and accepted, when the bill of entry was filed, and clearance was granted by the Customs department, and goods permitted to be cleared without payment of duty. We are not in a position to know what evidence was asked for by the department and produced before it with regard to the requirement in condition (v). However where the department has chosen not to call for such evidence, or found that the evidence which was produced was accepted and acted upon is now not acceptable, the notice to show cause must clearly specify the reason to it. Notice cannot be issued demanding duty once exemption is granted merely on the presumption that the exemption has been wrongly granted. There must be some basis for issue of notice. 6. Sin....