2001 (9) TMI 548 - AT - Customs

Summary

Issues:
1. Recovery of customs duty on goods imported under Notification 203/92.
2. Contravention of conditions for exemption under the notification.
3. Application of the Amnesty Scheme for reversal of modvat credit.
4. Calculation of modvat credit reversal and interest under the Scheme.
5. Evidence required for substantiating actual credit taken.
6. Decision on granting benefit of notification based on evidence produced.

Analysis:
1. The appellant exported dye intermediates and obtained an advance license under Notification 203/92 for duty-free import of goods. A notice was issued proposing recovery of customs duty on imported goods due to an alleged contravention of conditions for exemption under the notification.

2. The Commissioner found that the appellant had partially reversed the duty and interest, but not entirely, leading to the confirmation of duty for the remaining amount. The appellant contended coverage under the Amnesty Scheme introduced by the government, which required reversal of incorrectly availed modvat credit with interest to avoid penal action.

3. The Amnesty Scheme mandated the reversal of modvat credit with interest by a specified date to avoid penalties. A formula was prescribed for quantifying the credit to be reversed, considering the value of exports, credit availed, and consumption of goods. The appellant was found to have a shortfall in the reversal amount, leading to the confirmed duty.

4. Trade notices explained the formula for calculating modvat credit reversal and interest. The appellant was required to reverse a specific amount with interest, which was compared to the actual amount reversed before the Scheme deadline. The shortfall in reversal led to the duty confirmation by the Commissioner.

5. The appellant's evidence, including certificates from a cost accountant and an Assistant Commissioner, was deemed insufficient to substantiate the actual credit taken. The appellant claimed the ability to produce additional evidence to support the reversal of the correct amount, leading to a direction for the Commissioner to reconsider the case based on the new evidence.

6. The Tribunal allowed the appeal, setting aside the impugned order, and directed the Commissioner to review the evidence provided by the appellant within a specified timeframe. If the Commissioner finds the evidence satisfactory, the appellant should be granted the benefit of the notification, resolving the issue of duty recovery on imported goods under Notification 203/92.