TaxTMI 
TaxTMI 
2001 (4) TMI 97
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..../suffer, duties, fines and penalties. 2. Whether, as a consequence of the appointment of MMTC as canalizing agency for the import of gold, MMTC can be made liable for payment of Customs duty in the event the unit commits a breach of its obligation to export the jewellery made from such gold, and thereby allow all such defaulting units to escape scot free of any liabilities. 3. Whether the finding by the Hon'ble Tribunal that "the scheme provides for issuing of gold by M/s. MMTC to the unit only on the strength of Bill of Entry filed by the unit and duly assessed", does not lead to the conclusion that once the gold is issued to a unit, the liability for payment of duty in the event of default gets automatically transferred to the unit to whom the said gold is issued. 4. Whether there can be any requirement read into the REP Circular No. 22/98, as held so by the Hon'ble Tribunal, namely that "MMTC has a responsibility/continuing obligation to monitor the activities of the exporting unit and to ensure export of gold/ jewellery within ....
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....tly with a view to ensure an effective and efficient supply system. 3.Background facts as noted by the Tribunal essentially are as follows : Petitioner is a Public Sector Undertaking of the Government of India. Under the Export and Import Policy of the Government, as framed from time to time, Schemes were formulated whereby jewellery manufacturing units were permitted to import primary gold of 0.995 fineness for the purpose of manufacture and export of gold jewellery, subject to certain value addition norms. Such units were permitted to set up manufacturing facilities within the specified Export Processing Zones (in short "EPZ") or in Special Export Oriented Complexes subject to these units being 100% Export Oriented Units (in short "EOUs.). Para 88 of the Exim Policy 1992-97 deals with the schemes for export of gold/silver jewellery and articles. Para 88 is divided into Clause A to G and each clause governs a different Scheme. The broad outlines of the Scheme are as under: A. Scheme for export of gold/silver jewellery and articles against gold/silver supplied by the foreign buyer. B. &nb....
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....position of penalty on petitioner as well as penal action against the four units, the details of the notices are as under : Sr. No. Appeal Nos. before Tribunal Show cause Notice dated Quantity of gold issued by petitioner Unit to which gold was issued Duty demanded 1. C/A 50/98 16-1-1997 12 kgs. M/s. Amit Jewellers Rs. 34,80,000/- 2. C/A 51/98 Nil 8 kgs. M/s. Goldex Rs. 29,61,750/- 3. C/A 52/98 16-1-1995 9.986 kgs. M/s. Zevrat Overseas Rs. 36,74,598.35p. 4. C/A 53/98 15-10-1996 read with Corr. dated 26-3-1997 10 kgs. M/s. Unique Jewellers Rs. 29,00,000/- 4.Four separate adjudication orders were passed and  Commissioner of Customs (in short "Commissioner") confirmed duty demands and imposed penalties as detailed below (in respect to orders in appeals before Tribunal) : Sl. No. Appeal No. Penalty 1. 50/98 Rs. 5,00,000/- 2. 51/98 Rs. 2,00,000/- 3. 52/98 Rs. 10,00,000/- 4. 53/98 Rs. 2,00,000/- Revenue preferred appeal No. C/498/98-C against Commissioner's Order-in-Original No. ACU/DS/13/97, dated 30th August 1997 wher....
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....tipulated in the notification are not complied with, that cannot be a ground for denying exemption to the petitioner. It has been rightly observed by the Tribunal as follows : "A plain reading of the above notification makes it clear that the benefit of exemption from payment of duty is not available to gold imported by M/s. MMTC Ltd. if conditions of the proviso to para 2 of the Notification are not complied with. It is nobody's case that gem and jewellery units fulfilled the requirement of manufacture and export of gold and jewellery articles from the export processing zones. Therefore, duty liability definitely arises." 9.A bare reading of the notification makes the position clear that unless the procedure and the conditions stipulated are complied with exemption shall not be extended. It is trite law that in order to merit exemption, it has to be shown that the claim clearly comes within the provisions providing for exemption. Provisions of this nature must receive strict construction. There is consensus of judicial opinion that exemptions from taxation have a tendency to increase the burden on the other unexempted class of tax-payers, and should be construed against the ....