2015 (10) TMI 2610 - AT - Customs

Benefit of N/N. 203/92-Cus - denial on the ground that entire Modvat credit availed by the appellant along with interest have not been reversed before 31-1-1997 as prescribed under the Amnesty Scheme - Held that - In respect of identical issue in the judgments of Hello Minerals Water (P) Ltd. 2004 (7) TMI 98 - ALLAHABAD HIGH COURT and Steelco Gujarat Ltd. 2012 (8) TMI 175 - BOMBAY HIGH COURT hold that unless whole of the amount of Modvat credit along with interest are paid the benefit of Amnesty Scheme cannot be extended As regard the quantification error of the duty it is apparent from the annexure to the show cause notice as well as requantification chart submitted by the appellant that the quantification of demand is incorrect. In view of the above we hold that the import related to export wherein Modvat credit and interest thereupon was paid before 31-1-1997 the exemption N/N. 203/92-Cus. is admissible. The adjudicating authority shall verify the quantification of the duty and arrive at the correct quantification. Appeal allowed by way of remand.

Summary

Issues:
Customs duty demand denial based on Notification No. 203/92-Cus. compliance and Amnesty Scheme applicability.

Analysis:
The appeal challenged Order-in-Original confirming a Customs duty demand of Rs. 15,06,784/- against import made under Value Based Advance Licence. The dispute arose due to alleged non-compliance with condition (v)(a) of Notification No. 203/92-Cus. and violation of the Amnesty Scheme issued by the Government. The Commissioner observed that despite partial reversal of Modvat credit and interest payment, the reversal after 31-1-1997 did not comply with the Amnesty Scheme, leading to the denial of exemption. The Tribunal noted discrepancies in the duty calculation and remanded the case for de novo adjudication.

The appellant argued that substantial Modvat credit was reversed before 31-1-1997, complying with the notification's condition. Citing legal precedents, the appellant contended that once the credit and interest were fully paid back, it amounted to non-availment of credit. The appellant also challenged the duty calculation errors and asserted that the correct duty demand was significantly lower than determined. The Revenue, however, maintained that the appellant's actions did not meet the Amnesty Scheme's deadline, thus disqualifying them from exemption benefits.

After considering both sides, the Tribunal found that the Modvat credit and interest paid before 31-1-1997 should be deemed compliant with the notification's condition. However, for imports where the reversal occurred partly after 31-1-1997, the benefit of the notification could not be allowed. The Tribunal distinguished the judgments cited by the appellant, emphasizing the importance of full compliance with the Amnesty Scheme for benefit extension. Additionally, the Tribunal acknowledged the duty quantification errors and directed the adjudicating authority to recalculate the duty accurately before passing a new order.

Ultimately, the Tribunal allowed the appeal by remanding the case for a fresh adjudication, instructing the adjudicating authority to consider the observations made and ensure correct quantification of duty related to imports where Modvat credit and interest were paid before 31-1-1997 for exemption eligibility.

(Order pronounced in Court on 27-10-2015)