TaxTMI 
TaxTMI 
2026 (3) TMI 1160
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....ing five non-transferable Target Plus Licences issued to a Merchant Exporter with actual user condition and without any supporting manufacturer. M/s J.P. Enterprises allegedly lacked facilities to use the goods and diverted them to the local market thereby evading customs duty. It further appeared that imports through Chennai were actually made by M/s Amit Impex on a high seas sale basis and, after duty-free clearance in J.P. Enterprises' name, were taken back by Amit Impex. After following due process, the Commissioner confirmed the duty demands with interest, imposed equal penalty under section 114A of the Customs Act, 1962, and further imposed penalties on Shri Sushanta Kumar Chaudhuri and Shri Amit Kumar Jain under section 112(b). Hence, the present appeals. 3. The learned Advocates Shri Tapan Kumar Mitra and Shri N. Viswanathan appeared for the appellants and the Ld. Authorized Representative Shri Anoop Singh appeared for the respondent. 3.1 Shri Tapan Kumar Ld. Counsel for Shri Rajesh Gupta, proprietor, M/s J.P. Enterprises sand Mr Sushant Kumar Chaudhuri, submitted as under: A. The appellant, proprietor of M/s J.P. Enterprise and a recognized Star Export House....
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....impermissible; and * A purposive interpretation of the notification clearly favours the appellant. H. He relied on a large number of judgments in his written submissions. i. Commissioner of Customs, Mumbai Vs. Jagdish Cancer & Research Centre - 2001 (132) ELT 257 (SC) ii. Hissar Medical Diagnostic & Hospitals Ltd. Vs. Commissioner of Customs, New Delhi - 2006 (202) ELT 268 (Tri. Del.) iii. Fortis Hospital Ltd. Vs. Commissioner of Customs - 2015 (318) ELT 551 (SC) iv. Basudev Garg Vs. Commissioner of Customs - 2013 (294) ELT 353 (Del.) v. Ambika International Vs. Union of India - 2018 (361) ELT 90 (P&H) vi. Ummer Abdulla Vs. CCE & ST, Calicut - 2019 (367) ELT 181 (Ker.) vii. Commissioner of Customs, New Delhi Vs. Sameer Gehlot - 2011 (263) ELT 129 (Tri. Del.) viii. Vedanta Ltd. Vs. Commissioner of Customs, Tuticorin - 2018 (364) ELT 573 (Tri. Chennai) ix. Hi Tech Abrasives Ltd. Vs. CCE, Raipur - 2018 (362) ELT 961 (Chatt.) x. Laxmi Export Vs. CCE, Indore - 2018 (364) ELT 509 (Tri. Del.) xi. Commissioner of Customs Vs. Adani Enterprise Ltd. - 2016 (342) ELT A50 (SC) ....
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..... Though the adjudicating authority admitted that job work was carried out and that there was no legal bar on sale of processed goods to the appellant, exemption was denied on an alleged theory of orchestration-an untenable finding unsupported by any breach of the notification. These findings, not challenged by the Revenue, attain finality. Procedural issues relating to job work and endorsement are also settled in favour of importers by binding precedents. E. As per the judgment of the Hon'ble Madras High Court in B. Lakshmichand Vs GOI - 1983 (12) ELT 322 (Mad.), unless the show cause notice specifically alleges the exact sub-clause of Section 112 violated and sets out the manner in which the noticees attracted the said provision, the notice stands vitiated and hence the impugned order may be set aside with consequential relief. Accordingly, the impugned order deserves to be set aside and the appeal allowed with consequential reliefs. 3.3 Shri Anoop Singh the Ld. Authorized Representative appeared for the respondent and submitted as under: A. M/s. J.P. Enterprises imported six consignments through Haldia Port and thirteen consignments through Chennai Port b....
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.... on the assessee to show that his case comes within the parameters of the exemption clause or exemption notification. C. As per the Foreign Trade Policy 2004-09, "Actual User" means a person who utilises the imported goods for his own use and "Supporting Manufacturer" is one who manufactures goods/ products or any part/ accessories/ components of a good/ product for a merchant exporter or a manufacturer exporter under a specific Authorisation. Further there is nothing shown by the importer that mere slitting of paper rolls amounts to manufacture. D. In respect of the Haldia imports, the goods were cleared to a non-existent address at 15/1, Kaliprossonno Singhi Road, Kolkata, as confirmed by the occupier of the premises and the local Post Office. Shri Rajesh Gupta, Proprietor of M/s. J.P. Enterprises, admitted that the firm had no godown at the said address and failed to offer any satisfactory explanation for furnishing a false address. E. The claim that the goods were sent for job work to M/s. Arihant Mudra stands disproved by the categorical statement of the job worker that no goods were ever received and that the transactions were merely on paper. Despi....
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....ination. He hence prayed that the appeals may be rejected. 3.4 After the public hearing, the Ld. Counsel Shri Tapan Kumar Mitra, in his rejoinder dated 15.10.25, to the submissions made by the Ld. A.R. stated as under: A. The revenue's case is founded on a misreading of Notification No. 32/2005 dated 08.04.2005 and the object of the Target Plus Scheme; the conditions of the notification stand fully complied with, rendering the impugned order unsustainable. B. The allegation that entrustment of imported goods to job workers amounts to prohibited "transfer" is misconceived, as the notification prohibits only sale or transfer of title, which necessarily implies conferral of proprietary rights. C. Mere entrustment of goods to job workers for processing, without divestment of ownership, does not constitute transfer; job workers merely hold the goods as bailees for a limited purpose and return the processed goods, and temporary possession for processing is not transfer in law. D. The contention that the actual user condition was violated is untenable, since the condition is satisfied when goods are used for the declared purpose by or on behalf of....
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....ns relating to the misuse of the Target Plus scheme. 5. We find that the appellant have cited a large number of judgments in their submissions without mentioning the ratio of the said judgments and how they apply to the facts in issue. While dealing with a similar challenge this Bench recently, in our Final Order NO. 4033940341/2026, Dated: 10.03.2026 [2026 (3) TMI 440 - CESTAT CHENNAI], in the case of Panasonic Home Appliances India Co. Ltd. Vs Commissioner of GST & Central Excise, held as under: "5. Before going forward we must state that the Appeal Memorandum cites an unusually large number of judgments, copies of which have not been annexed. Only nine judgments were produced during oral hearing, and merely four or five were cited at the bar. Parties are expected to rely on a few leading judgments on an issue and supply copies to the Bench. In Rashmi Metaliks Ltd. Vs Kolkata Metropolitan Development Authority, [(2013) 10 SCC 95], the Hon'ble Supreme Court, expressing similar concern, held that: "6. . . The sheer plethora of precedents makes it essential that this Court should abjure from discussing each and every decision which has dealt with a similar quest....
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....given has to be stated on each issue so that the proposition can be appreciated in that light. 4. For each proposition, after stating the factual premises on which a particular argument is given, there should be first the applicable statute which can even be excerpted. Only then, case- law may be cited not just as the legal database on a computer shows up on a query; but each judgment has to be examined and only the more relevant ones for each topic be cited. The Court expects the lawyers to place all case laws, both for and against his case, so long as it is relevant to the proposition in question. Those from the Supreme Court be placed first; those from our High Court be placed next; and those from other High Courts be placed thereafter. In each grouping, the judgments are to be arranged in a reverse chronological order. This is in line with the law relating to precedents. Thereafter, for each decided case which appears to be important, a brief resume of the factual scenario in which the judgment was rendered, is necessary whereafter the relevant portion can be excerpted or described. 5. If there are older judgments which have been noticed in a later judgment, t....
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....n no. 32/2005 - Cus. dated: 08.04.2005, during the period between October 2006 and January 2009. The department has alleged that there was no mention of any supporting manufacturer on the impugned five Target Plus scheme licences. The importer M/s JP. Enterprises were allowed to import the goods under these licences subject to actual user condition. Relevant portion of the notification is extracted below: "Notification No. 32/2005-Cus Dated 08-04-2005 Exemption on goods imported into India against a Duty Credit Certificate issued under the Target Plus Scheme.- 5[In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962), the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts, - . . . . . . goods when imported into India against a duty credit certificate issued under the Target Plus Scheme in accordance with paragraph 3.7 of the Foreign Trade Policy (hereinafter referred to as the said certificate) from, - (a) the whole of the duty of customs leviable thereon under the First Schedule to the Customs Tariff Act 1975 (51 of 1975); and (b) th....
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....aid notification. The Department contends that under the Target Plus Scheme, a merchant-exporter cannot transfer or sell the licence or the imported goods and may utilise the goods through supporting manufacturers only if their names and addresses are endorsed on the licence. Since the appellant, being a merchant-exporter and had no endorsed supporting manufacturers, the Department asserts that the goods could not have been lawfully utilised through any supporting manufacturer. He could also neither transfer nor sell the licence or goods. 9. It is trite law that taxation under the Act is the rule, and exemption, either by way of policy or by a notification, is the exception. It is also well settled, as held by the Constitution Bench of the Hon'ble Supreme Court in Dilip Kumar and Company (supra), that the burden of proving eligibility to an exemption squarely lies on the assessee. 10. The matter can be looked at from another angel. Facts as alleged in the SCN, which are in the special knowledge of the appellants, must be demonstrated by them to be untrue (section 106 of the Evidence Act, 1872 / section 109 of the Bharatiya Sakshya Adhiniyam, 2023). Especially when the issue i....
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.... P. Enterprises has hence not discharged the burden of proof in this case. 11.1 We further find that the CHA delivery challans indicate delivery of the goods to 15/1, Kaliprossonno Singhi Road, Cossipore, Kolkata, an address at which M/s J.P. Enterprises was found not to exist, as confirmed during investigation by the occupier of the premises and the local Post Office. The proprietor of M/s J.P. Enterprises, Shri Rajesh Gupta, admitted that the firm had no godown at the said address and failed to offer any satisfactory explanation for furnishing a false address in the import documents. 11.2 As regards the purported despatch of goods to M/s Oxford Paper & Boards, Shri Ramesh Kumar Kataruka, Partner of the firm, they did not have any factory. They purchased paper Boards from J.P. Enterprises, Siliguri on six occasions. They were not aware of any firm by the name of M/s Arihant Mudra. M/s J. P. Enterprises were unable to show any records for despatch, job-work and return of the goods from M/s Oxford Paper & Boards. 11.3 It is also on record that three consignments were delivered to Siliguri, where admittedly no job worker of M/s J.P. Enterprises was located. These circumstanc....
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.... hoodwink the department. 12.3 The pattern of transactions, including high-seas sales, routing of goods through job workers under the control of a third party, and delivery of processed goods to M/s Amit Impex, clearly establishes a pre-arranged mechanism for handling and disposal of the duty-free imports through loose documentation, rather than genuine utilisation by the licence holder. 12.4 In the case of M/s Bhavish Associates, it was stated by Mr R. Manoj Kumar Agarwal that they were a paper merchant and they had purchased coated paper in sheets from M/s Amit Impex, Chennai. During 2009 they had purchased coated paper sheets from M/s J.P. Enterprises and the goods were delivered from 41, Theyagappa Chetty Street, Korrukkupet, Chennai. It is seen above hat the said address belonged to M/s Amit Impex. 12.5 It was expected that the importer M/s J.P. Enterprises, rebut these allegations with proper evidence as is expected from a businessman having genuine business transactions and where he is in a position to provide records of the transactions made and which are in his special knowledge. But no such explanation was forth coming. Hence the importer has not been able to dis....
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....mination is not a matter of right in every case and is required only where, based on the facts and circumstances, denial thereof would cause prejudice to the concerned party. It held: "19. The Court is of the considered view that parties cannot, by praying for cross-examination, cannot convert Show-cause Notice proceedings into minitrials. Persons seeking cross-examination ought to give specific reasons why cross-examination is needed in a particular situation and that too of specific witnesses. A blanket request to cross-examine all persons whose statements have been recorded by the Department, many of whom are typically employees, sellers, purchasers, or other persons connected to the entity under investigation, cannot be sustained. If a prayer for cross-examination is made, the Authority has to consider the same fairly and if the need is so felt in respect of a particular person, the same ought to be permitted. If not, the Authority can record the reasons and proceed in the case. Moreover, cross examination need not also be of all persons whose statements are recorded. It could be permitted by the Authority in case of some persons and not all." 14.2 Recently the Hon'....
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.... is well settled that though the right to cross examine a given witness may not be provided by or under the statute, it being a part of the principles of natural justice should be held to be an indefeasible right. But the assessee must still make out a case for cross examination. It will not be "Ask, and it shall be given". The assessee seeking cross-examination ought to give specific reasons why cross-examination is needed in a particular situation and that too of specific witnesses. A blanket request to cross-examine all persons whose statements have been recorded by the department, cannot be sustained (vide 2025 (4) TMI 1154, Vallabh Textiles v. Addl. Commissioner, Central Tax (GST) = 2025-TIOL-680-HC-DEL-GST." 14.4 The judgments cited by the Revenue above, including Paragon Steel, Stalin Joseph, Al Jalaludeen, and Thir'ven Steels Pvt. Ltd., including those of the High Courts relevant portions of which have been extracted above, support the proposition that denial of cross-examination does not vitiate proceedings where independent documentary and circumstantial evidence establish the contravention, and no demonstrable prejudice is caused to the noticees. These principles squa....
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....ves manufacturing any product or part / accessories / components of that product as required by the Foreign Trade Policy to show 'utilisation' of the goods by the job workers. 14.6 The appellants have also relied upon Rupa & Co. (supra), to submit that exemption notifications must be interpreted purposively. While there can be no quarrel with the principle that beneficial notifications should be interpreted to advance their object, it is equally well settled that conditions attached to an exemption must be strictly complied with. In the case of Competent Authority Vs. Barangore Jute Factory reported in (2005) 13 SCC 477, it has been held by the Hon'ble Apex Court that where statute requires an act to be done in a particular manner, the act has to be done in that manner alone. [Also see: A.K. Roy Vs. State of Punjab - (1986) 4 SCC 326 and CIT Vs. Anjum M.H. Ghaswala - (2002) 1 SCC 633]. The same would apply to a policy notification as well. A purposive interpretation, as intended by the appellant, cannot be stretched to condone non-compliance with express conditions, particularly the actual user condition, which forms the very foundation of Notification No. 32/2005-Cus. The d....