TaxTMI 
TaxTMI 
2018 (6) TMI 20
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....final goods to the identified buyers under shipping bills and corresponding ARE-I forms. Department took the view that the goods were not supplied free of cost by the foreign supplier but at a cost. Hence, they would not be entitled to duty exemption benefit under Notification No.32/97-Cus. Department issued show cause notice dated 21.6.2010 with respect to two Bills of Entry inter alia proposing demand of duty foregone on the grounds that appellants were not eligible for exemption under Notification No.32/1997. Subsequently, appellants were issued fresh show cause notice dated 6.11.2010 proposing to deny the benefit of Notification No.32/1997-Cus. in respect of the consignments cleared by appellants under 10 Bills of Entry alleging duty foregone amounting to Rs. 1,13,41,444/- with interest, confiscated imported goods and imposition of penalties under various provisions of law. In adjudication, vide impugned order dated 15.7.2011, Commissioner took note of the Memorandum of Understanding between the appellant and the foreign supplier as per which appellant has to pay for raw materials imported by them and concluded that in the import invoice, the words are clearly shown as "FOB Chi....
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....dvance payment before export of goods. In spite of the same, they have not received anything from the customs authorities against this communication. Appellant did not also have any problems in the assessment of Bills of Entry for the impugned raw materials and availment of duty exemption benefit under Notification 32/97-Cus. 2.4 Subsequently, the impugned raw materials were worked upon and the finished product Human Hair Remi Single Drawn etc. was exported only as per the directions of the foreign supplier to various consignees in Brazil, Miami, USA etc. 2.5 The Notification 32/97 requires that there should be a value adoption of 10% which has been exceeded in the present exports. 2.6 Ld. counsel also drew attention to the copies of ER-II, bank realization certificates etc. related with the exports of the job worked products. 2.7 Considering that the appellant had themselves informed the department about the nature of the work, especially the fact that they would be effecting payment for the raw material to the foreign supplier, proceedings initiated against them by show cause notice dated 6.11.2010 will be hit by limitation. 2.8 No suppression or mis-statement of facts can b....
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....the same. 3.5 It is not the duty of the department to teach the law. If the department had instructed them not to avail the notification, the appellant would not have done so is not sound argument. There cannot be any intendment while interpreting notification and notification has to be construed strictly. To support his argument, ld. AR relied upon the decision of the Hon'ble Supreme Court in the case of Commissioner of Central Excise, Chandigarh Vs. Mahaan Dairies - 2004 (166) ELT 23 (SC). They could have very well imported the goods through other advance authorization or other scheme instead of availing Notification 32/1997-Cus. 4. We have heard both sides and gone through the case records. 5. The dispute that comes up for resolution in this appeal concerns the eligibility of the appellant to the duty exemption extended under Notification No.32/1997-Cus. dated 1.4.1997. To understand the matter in broader perspective, it would be useful to reproduce the said notification as amended from time to time:- "In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962) and in supersession of the notification of the Government of India ....
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....he said resultant products; (v) that the jobbing is undertaken in accordance with the procedure set out in the Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996. Provided that where the jobbing is to be undertaken by or through cottage industry without being confined to any specific premises, the importer shall execute a bond with such surety or security and in such form and for such sum as may be specified by the Assistant Commissioner of Customs, binding himself to pay on demand an amount equal to the duty leviable on the goods imported but for the exemption contained herein, in respect of which the conditions specified in this notification have not been complied with. (vi) that the imports and exports are undertaken through sea ports at Bombay, Calcutta, Cochin, Kandla, Mangalore, Marmagoa, Madras, Nhava Sheva, Paradeep, Tuticorin and Visakhapatnam or through any of the airports at Ahmedabad, Bangalore, Bombay, Calcutta, Coimbatore, Delhi, Hyderabad, Jaipur, Madras, Srinagar, Trivandrum and Varanasi or through any of the Inland Container Depots at Bangalore, Coimbatore, Delhi, Gauhati, Hyderabad, Kanpur, Ludhiana, Moradab....
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....009 placed purchase order for job work of "Human Hair Remi Single Drawn". The said job order also instructs that the resultant product should be exported to consignee in Brazil. It is also informed that the quantity and value, buyer/buyers would be intimated to appellant on a case to case basis for a job order of 525 Kgs. It has been instructed that the importee consignee would be a party in Brazil. 5.4 There is also no allegation that the appellant has not complied with the requirements of Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods), Rules 1996. In the application dated 17.7.2009, made under the Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods), Rules 1996, seen at page 60 onwards of Vol. I, the schedule annexed to the bond clearly indicates that the import item is "unprocessed human hair raw". The FOB value of the imported goods in dollars and rupees is indicated. The date of import is also worked out and indicated and the claim of full duty exemption under Notification 32/97-Cus. dated 1.4.1997 has also been indicated. From perusal of the Customs (Import of Goods at Concessional Rate of Dut....
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.... before us, we find that the appellants have made reference to the commercial invoices of the foreign supplier and have also declared the price in US Dollars as shown in that invoice. The claim of Notification 32/97-Cus. on job work has also been indicated in the Bills of Entry. 5.9 Thus, all the requirements and conditionalities of the notification have been complied with or satisfied by the appellant. We find that there is no dispute that appellant has not satisfied or complied with the requirements of Notification No.32/1997-Cus. The ostensible purpose of laying down such a condition in the Notification is, in our view, three fold:- (a) Firstly, to create more opportunities and avenues for importer-manufacturer in India to import goods for jobbing / job work as per the requirements of foreign parties. (b) Secondly, there has to be a value adoption of at least 10% when the resultant products are exported (c) Thirdly, there should not be any foreign exchange outflow towards cost of raw materials. 5.10 In our considered opinion, after doing all the arithmetic, if there still emerges a minimum of 10% value addition between the raw materials imported and that of the resultant....