TaxTMI 
TaxTMI 
2026 (1) TMI 1244
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....O) in full, in terms of value and quantity. 3. The core issue revolves around Advance Authorizations bearing Nos. 3510025541 dated 02.01.2009, 3510028373 dated 30.11.2009 and 3510030535 dated 10.06.2010 obtained by the Appellant, whereunder, the Appellant was allowed to import copper concentrate duty free, subject to the condition that the Appellant would export copper anode/anode slime to the extent the export obligation was specified under the said three Advance Authorizations. The fulfillment of export obligation in the said 3 Advance Authorizations was subject to both, quantity and value. 4. The Advance Authorization Scheme is one of the various schemes introduced by the Government, under the Foreign Trade Policy, ('FT' for short) read with the Hand Book of Procedures, ('HBP' for short), for incentivizing exports. Under the Scheme, a manufacturer-exporter is allowed to import without payment of any duties of customs, raw materials as per a fixed Input-Output Norm, subject to fulfillment of export obligation, as prescribed by the Licensing Authority/Regional Authority (DGFT), both in terms of value and quantity, within the stipulated time period. In consona....
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.... EODC is issued by the DGFT only in cases where the EO is fulfilled and a copy of the EODC is, as a practice, forwarded by DGFT to the appropriate Customs Authority. It is also undisputed that the Customs, by their letter dated 26.07.2022 informed the Appellant that the Bonds executed in respect of the 3 Authorizations in question have been cancelled. 10. On 17.07.2019, the DRI issued a Show Cause Notice under Section 124 read with Section 143 of the Customs Act, 1962 to the Appellant alleging shortfall in fulfillment of the EOs qua the 3 Advance Authorizations and that the Appellant had violated condition (viii) of Notification No.96/2009-Cus. and condition (ix) of Notification No.99/ 2009-Cus., which required the Appellant to discharge the EO as specified in the Authorizations (both in value and quantity terms). The Show Cause Notice accordingly hinted that the Appellant was liable to pay the amount of Customs duty attributable to the unfulfilled portion of EO in terms of value and quantity, as the case may be. It appears that the Appellant filed its detailed reply justifying its claim which is considered in adjudication by the Commissioner. 11. The Show Cause Notice then c....
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....e is also an observation on the condition of Notifications having not been fulfilled by the Appellant and the Appellant having not paid the Customs duty but, however, as on the date of passing of the Order-in-Original, the Appellant appears to have paid the duty along with applicable interest and after satisfying, the DGFT had in fact issued EODCs as early as in the year 2017 itself as evidenced by the documents placed at pages 125, 126 & 128 of the Appeal Memo before us. This only shows pick and choose attitude of the Commissioner. Further, at paragraph 4.7 of the Order-in-Original the Commissioner concludes that the "Issuance of EODC will not absolve them from the non-fulfilment of conditions laid down in the Customs Notifications No.96/2009-Cus. both dated 11.09.2009". We are afraid the above conclusion is in stark contrast to the law laid down by the higher courts and the Hon'ble Apex Court. In the case of Greatship (India) Ltd. Vs Union of India [2016 (338) ELT 545 (Del.), the Hon'ble Delhi High Court has held as under : "26. As already noticed it is the DGFT who issues the HBP. In terms of the FTDR Act, the DGFT is the final authority as far as the interpretation of ....
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....phrase should have been "duty credit scrips". It was suggested that the "insistence by C.B.E. & C. that goods imported by use of SFIS scrip may not be alienated unconditionally, even after three years of import, can be attributable to this inadvertent choice of words." Importantly it was pointed out that "the scrip itself is a benefit that has been 'earned"'. This also answers the misconception of the DoR that customs duty can only be paid in cash, and that use of duty credit scrips is only 'revenue foregone'. The position has been explained by the Madras High Court in Tanfac Industries Ltd. (supra), where it was held that the goods cleared by using DEPB scrips for payment of duty should be treated as duty payable goods and not as duty exempted goods." 15. In the back drop of the ratio in Greatship (India) Ltd. (supra), we proceed to analyze the issue in the case on hand and we deem it appropriate to reproduce the text of the said conditions (of Notification Nos.96/2009-Cus. and 99/2009-Cus.) herein below for better appreciation of the dispute: "that the export obligation as specified in the said authorization (both in value and quantity terms) is discharged within the ....
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.... the Customs authorities and demands be raised in cases where there is a short fall in fulfilment of EO on a standalone basis, which otherwise stood fulfilled as a consequence of clubbing of Authorizations. When the condition relating to fulfillment of EO in the Customs Notification is with reference to what has been specified in the Advance Authorization, the said condition in the Customs Notification is to be read in the text and context of the provisions of the FTP read with HBP, and not in its isolation. 19. In view of the fact of the DGFT having regularized the shortfall on Appellant's part in fulfillment of the EO in respect of the Authorizations in terms of para 4.28 of HBP (2009-2014) / 4.49 of HBP (2015-2020) and also redeemed all the three Authorizations by way of issuance of the EODCs in terms of para 4.49 (b) of HBP (2015-2020), the demand of Customs Duty on the ground that EO as contemplated under condition Nos. (viii) and (ix) of Notification Nos. 96/2009-Cus and 99/2009-Cus, does not survive. It is useful at this juncture, to refer to and rely on the decision of Apex Court in Titan Medical Systems Pvt. Ltd. vs. Collector of Customs, New Delhi [(2002 (11) TMI 108 =....
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....ted into India against the advance licence for subsequent exportation. In the instant case, the licence specifically states that the petitioner is entitled to import die steel as a material required for the manufacture of resultant products. The Apex Court in the case of Titan Medical Systems Pvt. Ltd. v. Collector of Customs reported in 2003 (151) E.L.T. 254 (S.C.) has held that once an advance licence is issued and not questioned by the licensing authority, the Customs authorities cannot refuse exemption on an allegations that there was any misrepresentation. In the present case also, the licensing authorities have not found fault with the statement of the petitioner that the die steel is a material required in the manufacture of resultant product and have granted advance licence to the petitioner. Assuming that the licensing authorities have wrongly accepted the statement of the petitioner, so long as the licence is valid and subsisting the import of materials set out in the advance licence are liable to be cleared duty free, under Notification No. 116 of 1988 and the Customs authorities cannot deny duty free clearance of the materials set out in the licence. It is open to the C....
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....t and its order has been accepted by the Revenue. Hence the Revenue cannot be seen to be critical of that order, nor can the DR be heard to argue against it. It goes without saying that the case law cited by Id. SDR cannot improve the Revenue's case or plight. The Revenue's allegation was that the appellants had violated conditions (vii) and (viii) of Notification 30/97 and similar conditions of Notification 51/2000. But, in this regard, the DGFT's order has taken the wind out of the Revenue's sails. In the result, the charge of breach of conditions of the Customs Notification does not survive." An identical view was held by this Tribunal in the case of Bharath Steel Corporation v. Commissioner of Customs, Chennai, and Ashok Enterprises v. Commissioner of Customs, Chennai supra. A similar issue came up for consideration before Tribunal in the case of Kukar Sons (Indo-French) Exports Ltd. v. Commissioner of Customs, Jaipur. In that case the Revenue alleged violation of conditions of Notification No. 204/92-Cus. by the appellants as they failed to realise the sale proceeds of exported goods. The DGFT, which is the competent authority in the matter of advance ....
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....le Supreme Court observed thus - "23. There is another reason why the action of the DCCT cannot be upheld. The primary facts relating to the processes undertaken by the appellant at its unit were known to the Department of Industries and Commerce and the DCCT. The only question was what was the proper conclusion to be drawn from these. The Department of Industries and Commerce which was responsible for the issuance of the 1993 G.O. accepted the appellant as an eligible industry for the benefits. Apart from the fact that it can be assumed that the Department of Industries was in the best position to construe its own order, we can also assume that in framing the scheme and granting eligibility to the appellant all the Departments of the State Government involved in the process had been duly consulted. The State, which is represented by the Departments, can only speak with one voice. Having regard to the language of the 1993 G.O. it was the view expressed by the Department of Industries which must be taken to be that voice." We find that in the case in hand different yardsticks are being applied by two different wings of the Central Government. The Central Government....
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....to what is specified in Public Notice/Handbook of Procedure, would give way to those specified in the Public Notice. The obvious reason for such a provision in the FTP is that the benefits conferred and promised under the FTP issued under FTDR Act cannot be denied either in view of the absence of any Notification or any contrary or ambiguous Notification or Circular issued under the Customs Act, 1962. If the Central Government in its wisdom introduces a beneficial scheme or provision under the FTDR Act, the benefit of such legislation are to be made available by another Department of Central Government namely the Customs Department for which purpose Notifications and Circulars are issued under the Customs Act, 1962. Neither such Notifications and Circulars can be interpreted to take away the benefit which is otherwise available under the FTP and HBP, nor any further clarification or instructions may be insisted by the Customs Department, when the provisions of the FTP and HBP mandate grant of such benefit. In M Far Hotels Limited v. Union of India, 2011(270) E.L.T. 158 (Ker. HC), despite there being absence of any Notification under the Customs Act to confer the benefit of duty cre....