TaxTMI 
TaxTMI 
2008 (7) TMI 964
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.... submissions made in open court during the days of hearing before us. 2. Gujarat Pipavav Port Ltd. (GPPL) conceived a ship-breaking project for the port of Pipavav and applied for funding from Overseas Economic Cooperation Fund (OECF) of Japan, which was granted. A Consortium/agreement dated 31-3-1997 was made between KOATEX INFRASTRUCTURE LDT. (KIL) and M/s. Chiyoda Corporation, Japan, in terms of which KIL was to act as leader of the Consortium for the Pipavav Port Ship Breaking Project planned by Gujarat Pipavav Port Ltd. (GPPL). There was another Consortium Agreement dated 12-6-1997, which was not produced before the investigating officers, though repeatedly asked for. Vide Addendum dated 15-12-1997 to this agreement dated 12-6-1997, the scope of the work was redefined and KIL was entrusted the responsibility of modification/addition/alteration/assembly/fabrication of the offshore procurement to suit the project authority. Chiyoda Corporation undertook to pay KIL JY 130,000,000/- for the service to be done in India on their behalf. It was also mentioned that the work to be done in India would be deemed to be complete to that extent. The amending Agreement dated 15-12-19....
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.... of M/s. Chiyoda for overseas procurement were not indicated. 6. KIL filed application for issue of Special Import Licence (SIL) with the Jt. DGFT, Mumbai vide their letter dated 31-10-1998. In terms of Para 7.6 of the Export-Import Policy 1997-2002, KIL was granted SIL No. 3026445 dated 20-11-1998 for USD 2,22,53,640/- equivalent to Rs. 93,46,52,880/- on CIF basis, against which they were required to supply the goods, valued at USD 4,64,28,571.42 equivalent to Rs. 1,95,00,00,000/- on FOB basis. Along with the SIL, KIL were also given the DEEC Book No. 280050 for imports and DEEC Book No. 280050 for Exports. The SIL was limited by quantity as well as value and valid for 18 months i.e. upto 19-5-2000 with Export Obligation period of 18 months. It was also specifically prescribed in the condition sheet attached to the SIL that the exempted goods imported .against the SIL should only be utilized in accordance with the provisions given in Chapter VII of the Export-Import Policy 1997-2002, Hand Book of Procedures 1997-2002 and the relevant Customs Notification. The export obligation set out under the SIL specified that KIL needed to supply "Construction and commissioning of Ship....
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....t been fulfilled even within the extended period of discharging the Export Obligation and even thereafter during the period of investigation by DRI in the year 2004. The investigation conducted by the DRI revealed that Shri V.G. Honnavar MD of PSEL had signed the Part-H which declared that the MSBY project after duly being constructed and commissioned had been delivered to them by KIL alongwith the yard, building construction, equipments/plants and auxiliary equipments. In token of having received a fully commissioned project, Shri V.G. Honnavar MD of PSEL endorsed and accepted the goods against the various invoices attached to the list of Exports in Part-F. Consequently, the ownership of the MSBY, its buildings, equipments, plants and other infrastructures should have been passed on to PSEL. However, KIL continued to have in their possession all the imported and a large part of indigenous equipments, which had been procured by them against the SIL. 8. The learned SDR further drew our attention to the various documents. Survey Report etc. referred to in the Review Order as well as the impugned Order. He further stated the respondent has made a false statement, that the EODC....
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....oceedings before the DGFT Authorities, culminating into the passing of the Order of the Additional DGFT dated 30-6-2005 and he has also produced the Application dated 5-10-2002 addressed to the DGFT Authorities requesting for grant of EODC against Special Imprest Licence No. 03026445, dated 20-11-1998. The verification Report dated 18-5-2004 has also been seen by us as well as the decision of the Hon'ble Single Member in the case of Respondent as reported in 2004 (175) E.L.T. 507. We have also seen the decision of the Hon'ble High Court of Bombay in the case of Apollo Seafoods reported in 2000 (2) MHLJ 70 (DB) A copy of the show cause notice issued by the Additional Director General, DRI, Jamnagar dated 4-10-2004 has also been produced before us by the Respondent. It was contended that the Director, Drawback had already given a clarification by letter dated 12-8-1999, which was relied upon by the Adjudicating Authority and there was no challenge by the Revenue in the appeal filed against the Respondent only. A summary of events was also made and it was contended that the goods had landed directly in the premises of the Port itself and there is a Customs Officer posted permanently i....
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....ufactured and supplied as required under this notification, the importer may use the said materials for the manufacture of any other goods. (ii) "materials" means - (a) raw materials, components, intermediates, consumables, computer software and parts required for the manufacture of final goods : (iii) "Final goods" means - (a) supplies made to United Nations Organization under the aid programme of the United Nations or other multilateral agencies and paid for in foreign exchange; (b) supplies made to project financed by multilateral or bilateral agencies/Funds as notified by the Department of Economic Affairs, Ministry of Finance under international competitive bidding or under limited tender system in accordance with the procedures of those agencies/Funds where the legal agreements provide for tender evaluation without including the Customs duty; 11. It was stressed that the entire thrust of the Notification created a nexus of supply of final goods vis-à-vis discharging the obligation. The exempt materials ha....
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....ven by the Survey Report, the final goods like burner, components of 150 Tonne Hydraulic Crane, components for sky master have been assembled, which led the Adjudicating Authority to hold that the condition of commissioning the equipment cannot be read as a part of Notification No. 36/97. 14. It was further submitted that an Adjudicating Authority was duty bound to consider as to whether the statements recorded u/s 108 of the Customs Act, 1962 during investigations were true and voluntary in nature. Both these ingredients had to be mandatorily satisfied in order to treat the testimony worthy and credible in nature. The documentary evidences brought on record and rightly considered by the Adjudicating Authority far out weighed the oral testimonies, which in the overall facts and circumstances of the case, cannot be worthy of being relied upon to deny the benefit of the exemption notification because the issue of supply had become insignificant in this case, when the goods have been imported at Pipavav most of which were also found assembled over there, the Condition No. 4 and 5 of Notification No. 36/97 stand fully complied with. Hence, in our considered view, the benefit of....