2005 (6) TMI 414 - AT - Customs

Summary

Issues:
1. Import of inputs under DEEC scheme with exemption under Notification No. 203/92-Cus.
2. Alleged violation of major condition under the Notification regarding input duty credit.
3. Contesting denial of benefit and demand of customs duty.
4. Claiming use of indigenous inputs in manufacturing export goods.
5. Seeking reversal of credit for indigenous inputs.
6. Adjudication under the Central Government's amnesty scheme.
7. Dismissal of appeal challenging the Commissioner's order.

Analysis:

1. The appellants imported inputs under the DEEC scheme with an exemption under Notification No. 203/92-Cus. However, Customs authorities discovered that the appellants had availed input duty credit while fulfilling the export obligation, which was prohibited under the Notification. This led to a show cause notice proposing the denial of the Notification's benefit and a demand for customs duty on the imported goods.

2. Despite contesting the notice, the Commissioner of Customs, under the Central Government's amnesty scheme, dropped the proceedings after the appellants reversed the Modvat credit and paid interest before the deadline. The appellants, however, claimed that they used indigenous inputs in manufacturing export goods and mistakenly reversed the credit for those inputs, seeking to recover the credit in the appeal.

3. The Tribunal, after considering both sides, rejected the appellants' plea. They emphasized that the appellants had voluntarily submitted to the amnesty scheme, and the adjudicating authority had closed the proceedings based on the facts presented. The Tribunal held that the appellants could not now dispute the correctness of the facts submitted during the adjudication under the amnesty scheme, as what is settled under such a scheme remains final.

4. Consequently, the Tribunal dismissed the appeal, emphasizing that the appellants could not benefit from the amnesty scheme and then challenge the settled matters. The principle of not being able to have "one's cake and eat it" was applied, affirming the decision of the Commissioner and upholding the denial of the benefit and the demand for customs duty on the imported goods.

5. In conclusion, the Tribunal's decision highlighted the finality of settlements under an amnesty scheme and the principle of consistency in submissions made during adjudication. The appeal was dismissed, affirming the Commissioner's order and the denial of the appellants' request to reverse the credit for indigenous inputs used in manufacturing export goods.