TaxTMI 
TaxTMI 
2025 (8) TMI 1236
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....he Notification No.203/92 alleging that the appellant has failed to discharge their export obligation in respect of the import of M.S.Scrap and they had availed benefit of Modvat on inputs used in exported goods whereas the said notification specifically barred availment of Modvat on inputs. The matter was adjudicated, the demanded of customs duty and additional Customs duty was confirmed and penalty of Rs.2 lakh and redemption fine was also imposed to the tune of Rs.3 lakh. The said order was challenged before this Tribunal and this Tribunal remanded the matter back to the adjudicating authority for considering the submissions of the appellant and again vide order dated 30.11.2005, the adjudicating authority denied the benefit of Notification No.83/90-Cus dated 20.3.1990 as amended by Notification No.116/93-Cus dated 4.5.1993, which prescribed the customs duty @ 12% ad valorem as they had fulfilled substantive conditions of the said notification i.e. that they had utilized imported HMS in their own factory for manufacture of M.S. Ingots which were cleared on payment of duty and that the Deputy Commissioner, Central Excise verified the consumption of HMS and issued end used certifi....
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....VD should be demanded now when it is adjustable against admissible modvat credit keeping in view Revenue neutrality as upheld by the Supreme Court judgments. 4. He further submits that the Revenue was very much in the knowledge of the relevant fact that the Licence issued by DGFT permits the appellant to import re-rollable scrap to the appellant imported duty free Heavy Melting scrap against, which is in violation of provisions of Notification No.203/92. Therefore, the conditions of Notification No.203/92 are not applicable to the facts of this case and the show cause notice has been issued to the appellant for violation of conditions of Notification No.203/92 on this ground which is beyond the scope of show cause notice and the same is to be set aside. 5. He further submits that as the import of the goods in terms of Notification No.203/92 was in the knowledge of the Revenue and also the benefit thereof was to given to the appellant. Therefore, the show cause notice issued to the appellant is barred by limitation. He also submits that end used certificate has been produced by the appellant which is substantive requirement of Notification No.83/90Cus, therefore, the benefit o....
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.... to the appellant as the appellant surrendered advance licence as the appellant failed to complete his export obligation. Therefore, the Revenue in its right perspective to raise the demand as it is well settled law that any benefit of exemption notification and following of its conditions has to be construed strictly. To support his contention, he relied on the following decisions:- (i) Hemraj Gordhandas vs. H.M.Dave-CCE-1978 (2) ELT 350 (ii) Rajasthan Spg. & Weaving Mills v.CCE-1995 (77) ELT 474 (SC) (iii) Uttam Industries vs. CCE-2011 (265) ELT 14 (SC) (iv) Pappu Sweets & Biscuits vs. Commissioner Trade Tax, Lucknow-2004 (178) ELT 48 (SC) 9. He further submits that after remand by this Tribunal, the appellant tried to take the advantage of another exemption notification without following the procedure and conditions of the exemption Notification No.83/90-Cus and for end use certificate issued by the Central Excise authorities in July, 1996 but none of the other conditions of the said notification viz. filing of bond for following the procedures thereunder, extension from the Assistant Commissioner of Customs were not fulfilled. Therefore, t....
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....ances, it will not be proper to extend the benefit of DEEC benefits for the said goods and also enforce the condition imposed under the concerned notification. Therefore, we find that the request of the Ld. Advocate for permitting them to pay the applicable duty on the HMS after extending the notifications which were in force merits consideration. However, we find that the issue thought has been raised at earlier stages, the Commissioner has not given a finding. Therefore, we deem it proper to set aside the order of the Commissioner and remand the matter to consider these pleas afresh after giving reasonable opportunity of hearing to the appellant. The plea on admissibility of credit CVD will also be considered by the adjudicating authority at the time of re-adjudication." 16. As per the order of this Tribunal, this Tribunal has given direction that the adjudicating authority shall consider the plea of admissibility of CVD will also be considered by the adjudicating authority. The appellant has claimed the benefit of exemption Notification NO.83/90-Cus which provided clearance of goods on fulfilling of conditions of the said notification at concessional rate of duty. The appella....
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....e, in the facts and circumstances of the case, it is to be examined whether the appellant has complied with the conations under Notification No.83/90-Cus or not? 20. The substantial condition of the notification is that the imported goods are to be used in the manufacture of ingots which have been cleared on payment of duty. The other conditions are that the said goods to be used within six months if not then the time extension is required which can be granted. Further a bond in case failure to use goods and to execute the bond to utilize the goods in the manufacture of ingots which have been cleared on payment of duty. 21. In view of above discussion, it is coming out if end use certificate is produced that will qualify to comply all the conditions of Notification No.83/90-Cus as the extension of time is a procedural condition and execution of a bond is to safeguard the revenue in case of failure to produce the end use certificate. Therefore, we hold that the appellant has complied with the substantial condition of notification. In fact, the same is actual compliance of the said notification. Therefore, in terms of decision of Hon'ble Apex Court in the case of Hari Chand Shr....
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....l Excise duty, the appellants and buyer unit were both owned by the same assessee. In that background, the Tribunal held that the situation was revenue neutral. Admittedly, in the present case, whatever CVD has been paid by the appellant, the CVD entitled as modvat credit. The contention of the Ld. Consultant is also acceptable. 27. In view of the above discussion, we grant the benefit of exemption notification no.83/90-Cus as amended to the appellant and is entitled modvat credit on CVD paid by the appellant being revenue neutrality. Therefore, we remand the matter back to the adjudicating authority for quantification of the demand, if any, in terms of above directions. 28. In view of this, the appeal is allowed by way of remand as discussed above. (Order pronounced in the open court on ________________________) Sd/- (ASHOK JINDAL) MEMBER (JUDICIAL) - Separate order - (SANJIV SRIVASTAVA) MEMBER (TECHNICAL) Per: Sanjiv Srivastava I have gone through the order prepared by the learned Member (Judicial). However with all the respect to the efforts put in by him I do not find myself in position to agree with the same. 2. Since Member (Judic....
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.... follows: "Learned counsel contended that the importer is not to be blamed for non-compliance with the conditions prescribed in the entry because all what should have been done by them and what remained to be done was only that part which the authorities had to do in the matter. Obviously the aforesaid contention has no legs to stand at least in one case wherein no application was made at all for registration of the contract before the goods were cleared. In the other appeal it was submitted on behalf of the appellant that as a matter of fact the appellant had made the application before the goods arrived at the port. Counsel for the appellant invited our attention to a letter which appellant has addressed to "Ministry of Industry, Udyog Bhawan, Maulana Azad Road, New Delhi" as proof of such application. Learned Additional Solicitor General contended that the said letter could not be treated as the application contemplated in the proviso to Entry 84.66, as the ministry of Industry is not the prescribed authority for granting registration. Even assuming that the said letter should have been treated as the application contemplated in the proviso can the app....
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.... Court in State of U.P. vs. Manbodhan Lal Srivastava 1958 SCR 533, wherein their Lordships were considering the implication of non-compliance with the conditions provided in Article 320(3) of the Constitution on an order imposing punishment to a Government servant without reference to the Public Service Commission. While considering that question learned Judges made a reference to the Privy Council decision in Montreal Street Railway Company vs. Normandin AIR 1917 PC 142 and the Federal Court decision in Biswanath Khemka Vs. Emperor AIR 104 & FC 67. The Constitution Bench held that the provisions of Article 320(3) are not mandatory and non-compliance of those provisions does not afford any cause of action in a court of law. Privy Council in the above quoted decision has observed that the question whether provisions in a statute are directory or imperative depends upon the object of the statute and no general rule can be laid down. "When the provisions of the statute relate to the performance of a public duty and the case is such that to hold null and void sets done in neglect of this duty would work serious general inconvenience or injustice to person who have no control over those....
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....e and validity and, therefore, the exemption under the notification is as if it were contained in the Act itself. See in this connection the observations of this Court in Orient Weaving Mills (P) Ltd. v. Union of India, 1962 Supp 3 SCR 481 = AIR 1963 SC 98. See also Kailash Nath v. State of U.P., AIR 1957 SC 790. The principle is well settled that when two views of a notification are possible, it should be construed in favour of the subject as notification is part of a fiscal enactment. But in this connection, it is well to remember the observations of the Judicial Committee in Coroline M. Armytage v. Frederick Wilkinson, (1878) 3 AC 355, that it is only, however, in the event of there being a real difficulty in ascertaining the meaning of a particular enactment that the question of strictness or of liberality of construction arises. The Judicial Committee reiterated in the said decision at page 369 of the report that in a taxing Act provisions enacting an exception to the general rule of taxation are to be construed strictly against those who invoke its benefit. While interpreting an exemption clause, liberal interpretation should be imparted to the language thereof....
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....f Parle Exports Case (supra) deduced as follows: "Do not extend or widen the ambit at stage of applicability. But once that hurdle is crossed, construe it liberally". 47. We do not find any strong and compelling reasons to differ, taking a contra view, from this. We respectfully record our concurrence to this view which has been subsequently, elaborated by the Constitution Bench in Hari Chand Case (supra). 48. The next authority, which needs to be referred is the case in Mangalore Chemicals (supra). As we have already made reference to the same earlier, repetition of the same is not necessary. From the above decisions, the following position of law would, therefore, clear. Exemptions from taxation have tendency to increase the burden on the other unexempted class of tax payers. A person claiming exemption, therefore, has to establish that his case squarely falls within the exemption notification, and while doing so, a notification should be construed against the subject in case of ambiguity. 49. The ratio in Mangalore Chemicals Case (supra) was approved by a three-Judge Bench in Novopan India Ltd. v. Collector of Central Excise and Customs, 1994 ....
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....eady concluded in para 50 above, we may reiterate that we are only concerned in this case with a situation where there is ambiguity in an exemption notification or exemption clause, in which event the benefit of such ambiguity cannot be extended to the subject/assessee by applying the principle that an obscure and/or ambiguity or doubtful fiscal statute must receive a construction favouring the assessee. Both the situations are different and while considering an exemption notification, the distinction cannot be ignored. 52. To sum up, we answer the reference holding as under - (1) Exemption notification should be interpreted strictly; the burden of proving applicability would be on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification. (2) When there is ambiguity in exemption notification which is subject to strict interpretation, the benefit of such ambiguity cannot be claimed by the subject/assessee and it must be interpreted in favour of the revenue. (3) The ratio in Sun Export case (supra) is not correct and all the decisions which took similar view as in Sun Export Case (supra) stand....
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....tification No 203/92-Cus to the Appellants both on merits and on limitation, the issue in respect of demand made by the show cause notice has been foreclosed and could not have been raised in these proceedings. Secondly the revenue neutrality claimed by the Appellant's is not correct and contrary to the appeal filed by them. If the issue was revenue neutral than Appellant's would have paid the amounts due and taken the credit if admissible rather than pursuing and litigating the matter before various forums for more than twenty years. Hon'ble Supreme Court has in case of Star Industries [2015 (324) ELT 656 (SC)] stated in similar circumstances as follows: "35. It was submitted by the learned counsel for the assessee that the entire exercise is Revenue neutral because of the reason that the assessee would, in any case, get Cenvat credit of the duty paid. If that is so, this argument in the instant case rather goes against the assessee. Since the assessee is in appeal and if the exercise is Revenue neutral, then there was no need even to file the appeal. Be that as it may, if that is so, it is always open to the assessee to claim such a credit." 11. In view of the discuss....
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....1992 in terms of Value Based Advance License procured by them under DEEC. The benefit of duty free clearances was extended to the appellants against the bond executed by them as prescribed by the said notification. Subsequently, it was found that the license produced by the appellants for the clearance of goods claiming the exemption was not in respect of the same goods which were got cleared duty free by the appellants. Thereafter, the proceedings were initiated against the appellants for denying the exemption claimed and allowed at the time of clearance. 2.2 The adjudicating authority vide its Order-in-Original No. 70/97 dated 31.10.1997 confirmed the demand of customs duty of Rs.15,70,597/- and additional customs duty of Rs.3,57,445/- along with penalty of Rs.2,00,000/- and redemption fine of Rs.3,00,000/-. 2.3 On appeal, the Tribunal vide its Final Order No. 1021/2000 dated 22.11.2000 said aside the above Order-in-Original and remanded the case for considering the submissions of the appellants. 2.4 The case was adjudicated de novo vide Order-in-Original No. 34/CUS/2005 dated 30.11.2005, wherein the adjudicating authority did not accept the pleas of the appellants that ....
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....arty had executed a bond under Notification No. 203/92-Cus binding themselves to safeguard the revenue. He further supports the finding of the Member (Judicial) on the issue of availment of the benefit of CVD by relying upon the decision of the Tribunal in the case of Mafatlal Industries Ltd vs. Commissioner - 2009 (241) ELT 153 (Tri. Ahmd.) which had been upheld by the Hon'ble Supreme Court in the case of Commissioner vs. Mafatlal Industries Ltd - 2010 (255) ELT A77 (SC). 4.2 He further submits that the opinion of the Member (Technical) on both the issues, is not legally sustainable and there are certain factual inaccuracies in the order of the Member (Technical). He further submits that the finding recorded by the Member (Technical) holding that the appellants have not complied with the conditions of Notification No. 83/90-Cus and therefore they are not entitled to the benefit of the same, is not accordance with law laid down by the Hon'ble Supreme Court in the case of CCE, Delhi vs. Hari Chand Shri Gopal - 2010 (260) ELT 3 (SC). He further submits that the Member (Technical) has wrongly relied upon the judgment of Hon'ble Apex Court in the case of CC (Import), Mumbai vs. Dili....
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.... import of non-alloys and re-rollable scrap and not of M.S. scrap. But this mistake was not detected by the Customs officer while allowing the duty free import of M.S. scrap. Thereafter, during the remand proceedings, the appellants claimed the exemption under Notification No. 83/90-Cus and produced end-use certificate dated 02.08.1996 from the Assistant Commissioner of Central Excise certifying the end-use of the imported goods as required by the said notification. It is pertinent to note that in order to avail the benefit of Notification No. 83/90-Cus, following conditions have to be met: (a) the imported goods shall be used in the manufacture of the goods which have been cleared on payment of duty within six months; (b) if the imported goods have not been used in the manufacture of the goods which have been cleared on payment of duty, then the extension of time is required to be obtained from the Assistant Commissioner; and (c) to execute a bond to that effect if the end-use certificate is not produced and the appellant to pay duty applicable at the time of importation of the said goods. 8. I find that the Notification No. 83/90-Cus dated 20.03.1990....
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....om the jurisdictional Assistant Commissioner of Central Excise. In my view production of such an end-use certificate without getting any extension from the concerned Assistant Commissioner of Customs assessing and permitting the clearance of the said goods can be said to be substantial compliance with the conditions of the notification No 83/1990-Cus. Hence the benefit of this notification cannot be extended to the appellants." On going through the above para, I find that the learned Member (Technical) has clearly held that the appellants had never satisfied the conditions of notification by way of executing the bond as required in term of that notification and had not used the goods within six months from the date of clearance and produced the end-use certificate from the jurisdictional Assistant Commissioner; no extension of time limit of six months had been sought from the Assistant Commissioner; in fact, the end-use certificate was produced after more than two years without seeking extension which is in violation of the condition of the Notification No. 83/90-Cus. Here, I may refer to the judgment of Hon'ble Apex Court in the case of Star Industries vs. CC (Imports), Raigad ....