TaxTMI 
TaxTMI 
2017 (6) TMI 564
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.... licenses, the respondent has to export the products of quantities and values specified therein within a period of 18 months. On investigation conducted by the DRI, it was found that the respondents had diverted the imported raw materials and also had violated the conditions for import for duty free materials. A show cause notice was issued raising the following allegations and demand:- (i) the benefit of customs duty availed under notification Nos.43/2002-Cus. dated 19.4.2002 against the said three advance licenses should not be denied on the said quantity 1106.540 MTs of diverted/sold duty free imported raw materials (i.e. the goods found short during physical verification in the said factory) (ii) duty amounting to Rs. ....
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....ocess of law, the adjudicating Commissioner dropped the proceedings observing that there is no evidence for diversion of the raw materials which were found short at the time of investigation by the department. Hence this appeal. 3. On behalf of the department, learned AR Shri A. Cletus explained the facts of the case and submitted that the respondents were permitted to import total quantity of 1153.128 MTs under three Advance Licenses and they were to fulfill export obligation of 887.021 MTs. By utilizing the Advance Licenses respondents had made duty free import of 1114.540 MTs. They had exported only 6.120 MTs and the balance of 880.901 MTs export obligation was not fulfilled by them. If a total quantity of 8 MT is considered to be con....
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....ge of materials during the visit of the DRI officers, it is for the respondents to establish and explain the reason for the shortage. That when the shortage of duty-free imported raw materials remained an admitted fact, without any evidence or explanation by the respondent, the Commissioner ought not to have dropped the proceedings. He pleaded that the appeal may be allowed. 5. None appeared for the respondent even though notice has been issued to them. The case was listed on 4.11.2016, 27.12.2016, 4.1.2017 and 27.1.2017 after issuing notice to the respondents. Even today, i.e. 25.5.2017, there is no appearance on behalf of the respondent nor there is any request for adjournment. Hence the matter is taken up for disposal after hearing le....
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....had still sufficient time to manufacture and export the goods. The period prescribed to export the goods was not yet over when the investigation were launched, factory searched and the raw material seized and therefore I find to that extend they were prevented in carrying out the manufacturing activity to complete the export obligation. Next question that arises is that did they have the imported raw material to carry out the manufacture and export the goods. It is not disputed that there were finished goods, the manufacturing process was on, the raw material was in the manufacturing process and there were semi-finished goods. In the mahazar dt.01.12.04 drawn at the time of DRI visit to the factory, it is clearly mentioned on page 3-4 (of t....
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....7. It is seen that even though there is a huge shortage of imported duty-free materials and the respondent has not been able to explain the reason for shortage, the Commissioner seems to be carried away by the fact that there was sufficient time for the respondent to manufacture and export the goods. We cannot agree with this finding of the Commissioner for the reason that when there is shortage of duty-free materials, it is for the respondents to explain as to the reason for such shortage. The investigation was launched as the intelligence received that imported goods were being sold in local market through high sea sellers. From the records, it is clear that respondent has not been able to offer any explanation. Therefore, we find that th....