TaxTMI 
TaxTMI 
TaxTMI 
2015 (3) TMI 1213
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....The appellant M/s. USMS Saffron Co. imported Saffron under 10 Bills of Entry and availed nil rate of duty benefit under Notification No. 98/2009. They submitted transferable DFIAs Licenses for grant of benefit under the said notification. The DFIAs are transferable after redemption. The DFIAs were issued against the export of assorted confectionary and biscuits covered under standard input output norms (SION) E.1 & E.5 respectively. The import of Saffron against DFIAs issued in relation to export of assorted confectionary is subject to Note 2 under SION E.1 which reads as import of Saffron as flavour shall be allowed for 100gms against export of 100 kg of assorted confectionary subject to the condition that the quantity of saffron is actually used in the export product is mentioned in the Shipping Bills. This shall be applicable on the exports made w.e.f. 25.4.2007. Similarly the export product biscuit is covered under SION E.5 in the Handbook of Procedure Volume II (2009-2014). This SION E.5 was amended vide DGFT Public Notice No. 84/2009-14 dt.23.7.2010 by inclusion of a Note which reads as import item at Sr. No. 1,2,3,4 &5 shall be allowed with actual user condition and with acc....
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....ncorporated on the DFIA, it may be seen that the said condition is confined to Sr. Nos. 1 to 5 of the import items listed in the DFIA but in the amendment sheet dt.25.11.2011 attached to the said DFIA, the entry food flavourwhich includes saffron is listed at Sr. No.8. Therefore, the import of saffron is not restricted by any actual user condition in the DFIA. 4.1. The Ld. Counsel emphasized that the six DFIAs under consideration relating to the 10 Bills of Entry were duly examined by the assessing authorities and duty free import was allowed without any post-import actual user condition. The adjudicating authority confirmed the demand under Section 28 of the Customs Act, holding that a fraud had been committed but the demand notice dt. 30.11.2013 did not allege any fraud and was issued within one year of the clearance of goods. The Commissioner denied duty free benefit to the appellant on account of alleged fraud committed by the original license holder even though the transferee importer i.e. the appellant, is not connected with any fraud. As the order has travelled beyond the show cause notice by alleging fraud, it is not sustainable. He relied on CCE Vs. Ballarpur Industries L....
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....d been taken up with the licensing authority by the Commissioner of Customs. The licensing authority vide their letter dt. 16.10.2014 replied to the Commissioner that the benefit of transferability must be denied, due recovery may be made and penal action may be taken. However, this clarification is only with respect to DFIA No. 0310597237 dt. 15.10.2010 issued to M/s Laxmi International. In his written submissions submitted on 6th April, Ld AR enclosed a copy of the SCNdt 30-03-15 issued to M/s Laxmi by DGFT proposing to cancel the DFIA. 6.1. In his written submissions the Ld. AR drew our attention to the additional condition sheet attached to DFIA No. 0910049059 dt.27.9.2011 which states that the DFIA holder shall abide by other licensing conditions appearing in the Handbook of Procedures. Therefore, the importer cannot plead ignorance about the conditions attached to the DFIA. 6.2. Ld. AR relied on the case of Polyplex Corporation Ltd. Vs. Joint Secretary, Finance 2014 (306) E.L.T. 24 (All.) in which it was held that an executive order laying down something otherwise than what is prescribed in the notification is not permissible in law and mere executive decision cannot author....
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....ent as it related to a definite and conscious fraud committed. And the license issued by fraud was placed under suspension by the DGFT and later amended, which is not so in the present case. Similarly in the case of Nippon Bearings 2014(304) ELT 688 (Bom) the Honble High Court held that there was no valid license at the time of importation. In the present case no deliberate or even unintentional omission or commission by the importer is noticed by us. The DFIAs are purchased by the transferee in the open market and they cannot be held responsible for omissions, if any, made by the Licensing authorities while endorsing transferability. Even in the case of license issued to M/s Laxmi, the transferee cannot be held responsible. It was held by the Honble Supreme Court in the case of Collector Vs. Sneha Sales Corporation - 2000(121) ELT 577 (S.C. ) that In the aforementioned decision of this Court it has been clearly laid down that in a case where the license is obtained by misrepresentation or fraud it is not rendered nonest as a result of its cancellation. In the present case the licenses were cancelled by order dt. December 18, 1986 after the goods had been cleared. The Tribunal was,....
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....LNO. E.1 of HBP (Vol.II) as amended from time to time & clearance shall be permitted strictly as per the description mentioned in the SION. Any mis-match between this Authorization and the SION, corrections without proper attestations or for any other doubts, the Customs shall revert back to the Licensing Authority for proper rectification/authentication before allowing clearance of imports and exports under this Duty Free Import Authorization. From the above it is clear that the licensing authority is required to rectify the license before allowing clearance of imports. In the present case, neither the Customs reverted to the licensing authority nor the licensing authority rectified the license before allowing clearance. 7.4 The appellant have submitted copies of several DFIAs which are similarly placed and issued against SION E-1 and SION E-5. These DFIAs also do not bear the note under SION E-1 or the condition of Public Notice No. 84/2009-14 under SION E-5. A widespread issue of such authorizations indicates a practice. Therefore the duty free import cannot be attributed to any mistake on the part of the importer. The case of Air Travel Bureau Ltd- Delhi High Court- referred ....
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....s and in the amendments Sheet No.1 dated 14.10.2011 there is no restriction in respect of this entry whereas the restrictions are specifically mentioned against item No. 1 & 2 viz. Sugar and Liquid Glucose etc. The above shows that the restrictions appearing in the PN/SION norms relating to the individual items are invariably mentioned by the LA in the License at the time of issue or on transfer. If a particular DFIA does not contain an entry for restricting saffron, it shows that the LA considered it prudent not to make an endorsement. That they have not amended the DFIAs in question as far as saffron is concerned indicates a conscious action or inaction on the part of the DGFT for which the blame cannot be put on the importer. As a matter of record we find that the duty demand in the case of DFIA issued to M/s. Laxmi International works out to only Rs. 19,98,891/- as against the total duty demand of Rs. 1,59,89,118/-. The reliance placed by the Ld. AR on the case of Polyplex Corporation is not appropriate in the circumstances of the present case. In that case it was held by the Honble High Court that rebate cannot be denied on the basis of a Board Circular when it is permissibl....
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.... the duty leviable, but for the exemption contained herein, on the imported materials in respect of which the conditions specified in this notification are not complied with, together with interest at the rate of fifteen per cent. per annum from the date of clearance of the said materials; (iv) that in respect of imports made after the discharge of export obligation in full, if facility under rule 18 (rebate of duty paid on materials used in the manufacture of resultant product) or sub-rule (2) of rule 19 of the Central Excise Rules, 2002 or CENVAT Credit under CENVAT Credit Rules, 2004 has been availed, then the importer shall, at the time of clearance of the imported materials furnish a bond to the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, binding himself, to use the imported materials in his factory or in the factory of his supporting manufacturer for the manufacture of dutiable goods and to submit a certificate, from the jurisdictional Central Excise officer within six months from the date of clearance of the said materials, that the imported materials have been so used: Provided that, in case, (a) materials are imported agai....
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....ch extended period as the said Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, may allow; (ix) that exempt materials shall not be disposed of or utilized in any manner, except for utilization in discharge of export obligation, before the export obligation under the said authorization has been discharged in full: Provided further that where the Bond filed under condition (iii) against the said authorization has not been redeemed by the Deputy Commissioner of Customs or Assistant Commissioner of Customs, as the case may be, the unutilized material may be transferred to any other manufacturer except to the unit availing the benefit of notifications, Nos. 49/03-CE and 50/03-CE both dated 10thJune,2003, 32/99-CE and 33/99-CE both dated 8thJuly, 1999 , 8/04-CE dated 21stJanuary,.2004, 20/07-CE dated 25thApril,.2007, 56/02-CE and 57/02-CE both dated 14thNovember, 2002, , 71/03-CE dated 9thSeptember,.2003, 56/03-CE dated 25thJune,.2003 and 39/01-CE dated 31stJuly,.2001, for processing under actual user condition after complying the central excise procedure relating to Job work; (x) that in relation to the said authorization issued to a merchan....
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.... fulfilling export obligation. Transferee of a VBAL, as the appellant is, in no position to know that. Therefore, it is not correct to hold that the appellant has not been able to discharge the burden of proof cast on him to claim the benefit of the notification. Here in this exemption notification the expression 'importer applies to two persons - One is a licencee in whose name the VBAL has been originally issued and the other is a transferee of the licence. Various conditions of the notification may be required to be fulfilled by one, or other person or both. Condition No. (vii) alone governs the import made by a transferee licencee which is not disputed by Revenue to have been satisfied. Therefore, the appellant cannot be made to suffer in the present case. Therefore, we hold the view that duty is not demandable from the appellant and the benefit of notification No. 98/2009 is admissible. Consequently the confiscation as well as penalties are not sustainable. 8. Revenue is in appeal against the impugned order of Commissioner of Customs on the ground that the penalty under Section 114A imposed on the appellant is not adequate and the same needs to be enhanced to the extent of p....