2018 (11) TMI 354

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.... advance licence holder under Notification No. 23/2003-CE dated 31.03.2003 (Serial No. 22 condition No. 11 of the Notification). The Revenue sought to deny the exemption on the following two grounds. (a) That permission of Development Commissioner was not taken by the appellant for effecting the supplies to holders of advance license. (b) That the values of said supplies made to the holders of advance license exhausted the limit of 50% of the FOB Value of export prescribed under para 6.8 (a) of FTP for making DTA sales. 1.1 As regard appeal No. E/11108-11122/2017, the issue involved is that whether the appellant is entitled to clear waste and scrap by availing the benefit of exemption Notification No. 2/95-CE and later 23/2003-CE without the clearance of such waste and scrap is included in overall 50% of FOB value of exports which includes physical export as well as deemed export. The contention of the Revenue is that for the purpose of computing 50% of FOB value of exports only value of physical exports to be taken and not the value of deemed exports. 1.2 The adjudicating authority by adjudication orders confirmed the demands and imposed penalties on the appellant. Hence, the ....

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....ports in their quarterly and annual returns filed with the Development Commissioner. At no point of time, the Development Commissioner has raised any objection that permission of Development Commissioner was not obtained for making such supplies. This, itself shows that no permission was required. He further submits that supply of goods to holders of advance license are considered as deemed exports under para 8.2(a) of FTP 2004-09. Further para 6.9(a) of FTP 2004-09 provides that such supplies made by 100% EOU to holders of advance license will be counted for the purpose of fulfilment of positive NFE. This clearly shows that supplies to holders of advance license do not fall under the purview of para 6.8(a) and cannot be equated with DTA sales referred to in para 6.8(a). Consequently the restriction of 50% of FOB value of exports prescribed under para 6.8(a) of the FTP for making DTA sales is inapplicable to supplies made to sales to advance licence holders. He further submits that the supplies made by advance license holder is a deemed export. It is held by Hon'ble Gujarat High Court and this Tribunal held that deemed exports are at par with physical exports. He placed reliance on....

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....efore, the view of the appellant was on a bonafide belief, hence three was no wilful misstatement or suppression of fact on the part of the appellant. 4. Sh. J. Nagori, Ld. Additional Commissioner (AR) appearing on behalf of the Revenue reiterates the findings of the impugned order. He further submits that even though there is no explicit mention about the permission of the Development Commissioner but since physically goods were cleared in a domestic tariff area the permission otherwise was required for such removal. The supplies made to advance license holder may be treated as deemed export under the fiction of law but physically it is cleared domestically hence, the permission which is otherwise required for DTA clearance is equally applicable to these clearances also. He placed reliance on the following judgments. * Bony Polymers P. Ltd. 2016 (3430 ELT 288 (Del.) * Sheshank Sea Foods 1996 (88) ELT 626 (SC) * Sneh Enterprise2006 (202) ELT 7 (SC) * VVF India Ltd. 2015 (317) ELT 561 * Alnoori Tobacco Products 2004 (170) ELT 135 (SC) 5. We have carefully considered the submissions of both the sides and perused the records. We find that the whole issue to be decided is e....

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....fact clearly shows that there is no legal requirement in the statute for obtaining the permission from Development Commissioner for supplies made to advance license holders. In various judgments of Hon'ble Supreme Court as well as Hon'ble High Court, it has been held that the deemed exports made by 100% EOU is on par with physical exports, therefore, for all the purposes supplies made to advance license holder which is deemed export is considered as export. Even for the purpose of 50% sealing of DTA export of FOB value of exports, the issue have been settled that for calculating the 50% not only the physical exports but also the deemed exports should also be considered. As regard the issue on limitation, we find that since the appellant have been supplying the goods to advance license holder by intimating to the department and the departmental officer was debiting the advacne license/ advance release order the entire facts was well within the knowledge of the Department, therefore, there is no iota of suppression or mis-declaration on the part of appellant hence, the demand for the extended period issued in the SCN dated 05.05.2009 is clearly time barred. As per our above discussio....