TaxTMI 
TaxTMI 
2013 (9) TMI 64
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....aterials used for discharging the export obligation under the said licence. However, in violation of the said condition, the appellant availed input stage duty credit of the CVD paid. Accordingly a show cause notice dated 19th July, 1998, was issued to the appellant proposing to deny the exemption availed under the said notification at the time of import and demanding customs duty amounting to Rs. 11,71,181/- together with interest @ 24% under the provisions of Section 28 of the Customs Act and also proposing penalty under Section 112 ibid. The said notice was adjudicated vide order dated 31-8-2000 and the demands were confirmed inasmuch as the appellant failed to produce documentary evidence in support of their claim that they had not availed the input stage credit and also did not attend the personal hearing. The appellant preferred an appeal before this Tribunal which set aside the order and remanded the case back vide order dated 25-8-2001. The case was once again adjudicated by the Commissioner vide order dated 1-1-2009 confirming the demands against which the appellant preferred an appeal before this tribunal which once again set aside the order vide order dated 3-3-2009 and ....
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....ials used by them for discharging the export obligation under the VABAL licence and contrary to the said declaration, they were found to have availed input stage credit on the materials used by them for the manufacture of export goods. On verification of documents, it could not be confirmed that the amount reversed by the appellant pertained to the input credit availed by them. The appellant had claimed before the Tribunal that they were entitled to the benefit of the Amnesty Scheme introduced by the Government vide Circular No. 285/1/97-CX., dated 10-1-1997 which provided for reversal of Modvat credit and payment of interest where exports were effected under VABAL before 31-1-1997 under special scheme. Under the said scheme in addition to reversal of the credit wrongly taken, the exporters were required to pay interest @ 20% on the amount of Modvat credit retained by the exporters for the period between date of export and the date of reversal and the entire amounts had to be deposited before 31-1-97. However, in the instant case the appellant paid the interest only on 28-6-2001 thereby violating the terms and conditions of the amnesty scheme. Accordingly, the adjudicating authorit....
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....he said scheme. (7) Since at the relevant time there was no provision for paying interest on such Modvat credit, they had not made any payment towards interest at the time of reversal. However, on the request made by the jurisdictional central excise officers, the appellant paid the interest in June, 2000. (8) The imposition of penalty on the appellant would arise only when there is a wilful suppression which is non-existent in the present case. Further, invocation of the provisions of Section 112 of the Customs Act would arise only when there is a liability to confiscation. Neither in the show cause notice nor in the impugned order, is there any proposal or a finding thereof for the confiscation of goods. In the absence of such a finding, penalty is not imposable on the appellant. In the light of these submissions, it is prayed that the impugned order be set aside and the appeals allowed. 5. The ld. Addl. Commissioner (AR) for the Revenue strongly opposes the pleas made on behalf of the appellants. He makes the following submissions :- (1) Condition No. V(a....
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....the said scheme, the exporters should reverse the Modvat credit taken as per the formula prescribed and in addition to the above an interest @ 20% on the Modvat credit retained by the exporters for the period between the date of export and the date of reversal has to be calculated and deposited before 31-1-1997. Where the credit had already been reversed, the exporters shall deposit the interest amount calculated in the manner prescribed above before 31-1-1997 to avail the benefit of the scheme. In the present case, the appellant did not deposit the interest amount before 31-1-1997 nor did they correlate the amount reversed with the exports undertaken, thereby completely violating the terms and conditions for amnesty. When such conditions are violated, the appellant is liable to pay the duty foregone along with interest under the VABAL as held by the Hon'ble Apex Court in the Bharti Telecom Ltd. case 2001 (134) E.L.T. 327 (SC). The situation in the said case was identical to the instant case and therefore the ratio of the Hon'ble Apex Court decision squarely applies. The ld. AR also relies on the decision of this Tribunal in the case of Aksa Poly Bags Ltd. - 2004 (163) E.L.T. 99 wh....
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.... any input stage credit under rule 56A or 57A of Central Excise Rules, 1944." The appellant did not appear for personal hearing held on 8-2-2000 and 1-3-2000 nor did they produce any evidence to the effect that they had not obtained input stage credit on the materials. Accordingly the adjudicating authority confirmed the duty demand in the order passed on 31-8-2000. 6.2 The appellant preferred an appeal before this Tribunal against the said order which was heard and decided on 10-5-2001 vide Order No. CII/1757/WZB/2001. It was during the hearing, the appellant made the submissions which has been recorded as follows :- "2. Counsel for the appellant says that reply to the notice was sent, and adjournment requested of the hearings fixed on two dates in January and February, 2000 on the ground that the General Manager was out of station. He says, however, that the contention that was made in the reply that Modvat credit was not availed of is incorrect and was made because of inadvertence. The actual fact is that although credit was availed of, it was reversed in July, 1995, before the period of amnesty scheme introduced by the Government. The appellant therefore would be covered by t....
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....dvat credit reversible and reversed. The ld. Counsel has submitted that this very document was certified by the Asst. Commissioner and the same in original was produced before the adjudicating authority. However, in the Commissioner's order, it appears, there is no serious mention of this certificate of the Asst. Commissioner. May be, on better application of mind, the evidentiary value of the document might emerge. Coupled with this plea of evidence, the ld. Commissioner can also consider the "Summary of details of shipping bills" which has been produced to-day and was admitted not furnished to the Commissioner earlier. Certainly it is incumbent on the appellant to elaborate and establish the particulars mentioned in this 'summary'. For this purpose, we are inclined to remand the case to the lower authority." 6.4 In terms of the said remand directions, the impugned order has been passed. The ld. Commissioner's findings can be summarized as follows. The appellant imported the materials availing the duty exemption by subscribing to a declaration that they had not obtained input stage credit on the materials used by them for discharging the export obligation under the licence and co....
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....ed the said certificate. Nowhere in the said certificate, a copy of which is available in records, it is stated that the said certificate relates to the transactions undertaken by the appellant. The said certificate also does not give any details of the export documents so that co-relation can be made between the goods exported and the credit reversed. As early as 31-12-1999, the appellant was directed by the customs authorities to submit the following documents, namely, (1) copy of the advance licence; (2) copy of the shipping bills covering the export obligation under the advance licence; (3) copy of the relevant AR4 covering the exports under the relevant shipping bills; (4) copy of the DEEC part II duly logged; (5) a certificate from the jurisdictional AC/DC to the effect that input stage modvat credit under Rule 56A/57A had not been availed in respect of the goods exported; (6) a certificate from the jurisdictional AC/DC regarding payment of interest in case of delayed reversal of credit taken. These particulars were asked AR4-wise and Shipping bill-wise. However the appellant did not furnish the required information. Only at the time of hearing of the case second time by this....
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....cation of credit, if any, taken by the excise authorities at that point of time at all. Only in a case where the imports take place first and exports are made thereafter, it is possible for the excise authorities to keep a tack of the transaction and verify whether credit has been taken and if taken, has been reversed at the time of exports. The reliance placed by the appellant in the Chandrapur Magnet Wires case and Hello Mineral Water case does not help their cause as the facts are distinguishable. The decision in the Chandrapur Magnet Wires case related to reversal of the credit prior to removal of the goods and taking note of the Board's circular regarding the difficulty faced in maintaining separate accounts in respect of common inputs. However, the appellant therein had reversed the credit before removal of the exempted goods. In the present case the exports have taken place during 1992/93 whereas imports have taken place in April, 1994. At the time of importation, the appellant has subscribed to a declaration that "We hereby declare that no benefit under Rule 56A/57A/191A/191B has been availed of in respect of exports made under this DEEC". This declaration made by the appel....
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....dit is obtained under Rule 56A or 57A of the Central Excise Rules, 1944. 2. The department issued show cause notice dated 3rd September, 1997 alleged that the appellant had suppressed the fact that it had availed of Modvat credit on the inputs used in the manufacture of the exported goods for wrongly availing duty free benefit against the licence. 3. The appellant in response to the show cause notice stated that the advance licence was obtained by it on 1st June, 1993 and it had completed the export obligations by July, 1993. The appellant claimed that it had reversed the Modvat credit and rectified error in their records as far back as in January-February, 1994. It was further claimed that the circular dated 3rd January, 1997 issued by the Central Board of Excise & Customs had relaxed the conditions of Notification No. 203/92 in cases where the exporter reverses the Modvat credit incorrectly availed of by him with payment of interest at the rate of 20% of the amount of Modvat credit. In this view, the appellant sought cancellation of the show cause notice and dropping the charges made against it in the said notice.4 ................................................... 5. T....