2011 (1) TMI 1013

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....of Notification No.203/92 Cus dated 19.5.1992 and, accordingly, to recover duty on the raw material imported by them during 1993-94 under two Advance Licences. The appellant was the transferee of the said licences. The raw material imported by them had been allowed to be cleared duty-free under the above Notification. The show-cause notice alleged that, in the absence of evidence against the availment of input-stage credit in respect of the goods exported by the original licencee in discharge of export obligation under the DEEC scheme, Condition No. (V) (a) of the Notification had been violated and, consequently, no exemption from payment of duty on the imported raw material would be available to the appellant. The notice also alleged that ....

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....e, at the time of making such endorsement, ensured that not input-stage credit had been availed in respect of the exported goods. In this connection, the ld. counsel refers to paragraph 67 of the Exim Policy 1992-1997, which deals with transferability of Advance Licences. It is further submitted that the onus is on the department to prove that the exporter (original licensee) had availed input-stage credit. This burden was not discharged by the department in the present case and, therefore, the proposal to deny the benefit of Notification No.203/92 Cus to the appellant is illegal. In this connection, the ld. counsel has relied on the decision of the Supreme Court in the case of Commissioner of Customs vs. Auto Ignition Ltd [ 2008 (226) E.L.....

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....s where the modvat/proforma-credit facility under Rule 191B of the Central Excise Rules of 1944 had been availed of. Therefore, an endorsement of transferability on the Advance Licences by the DGFT would mean that the licensing authority verified the relevant records to ensure that Modvat credit had not been availed by the exporter who obtained the licences after discharging export obligation, realizing export proceeds and redeeming the Bank Guarantee/LUT. In this scenario, as rightly pointed out by the ld. counsel, the burden was on the department, in the context of seeking to recover duty from the appellant in respect of raw material imported duty- free under the aforesaid Notification, to show that Condition (V) (a) of the Notification h....