2013 (11) TMI 442 - AT - Customs

Benefit of Notification No.93/2004-Cus. - Import of raw sugar under advance licenses - Contravention of condition (v) of Notification No.93/2004 - Held that - The fact that the goods manufactured out of raw sugar imported without payment of duty has been exported is not dispute. Further, it is not clear how the rebate claimed by the merchant exporter is a benefit that would not have been available to the applicant if the applicant was to export the goods. There is no Chapter Note under Chapter 17 of the Central Excise Tariff in relation to Heading 1701 to the effect that packing of sugar in polythene bags will amount to manufacture. We also note that the ARE-1 were signed by both the applicant and the merchant exporter and thus it is not as if the goods were being disposed of in the domestic market. The goods were cleared under an undertaking to export the goods and such exports have taken place - it is proper to waive the requirement of predeposit of dues arising from the impugned order for admission of the appeal - stay granted.

Issues:
- Interpretation of Notification No.93/2004-Cus regarding rebate of excise duty on final products
- Export obligation fulfillment under the notification
- Dispute over goods exported through a merchant exporter
- Application for waiver of predeposit of dues

Interpretation of Notification No.93/2004-Cus regarding rebate of excise duty on final products:
The case involved the interpretation of Notification No.93/2004-Cus regarding the rebate of excise duty on final products. The applicant, a manufacturer of white sugar, had imported raw sugar under advance licenses and claimed exemption from import duty. The issue arose when the Revenue contended that claiming rebate on the excise duty paid on the final product contravened post-import conditions in the notification. The Tribunal considered the clarification issued through a Corrigendum and the argument that the rebate claimed was on the duty paid on the final product, not on the raw material used in manufacture. The Tribunal found no explicit condition in the notification prohibiting the rebate claimed on the final product, leading to the waiver of predeposit of dues for admission of the appeal.

Export obligation fulfillment under the notification:
Another issue was the fulfillment of export obligations under the notification. The Revenue argued that the goods had to be exported by the actual user, the applicant, and not through a merchant exporter. They relied on Foreign Trade Policy provisions indicating that the product manufactured out of duty-free imports could only be disposed of after export obligation discharge. The Tribunal noted that the goods were exported by a merchant exporter, but found no explicit condition in the notification or EXIM Policy requiring the goods to be exported by the importer themselves. Considering various factors, including the CBEC clarification on exports through a merchant exporter, the Tribunal waived the requirement of predeposit for the appeal.

Dispute over goods exported through a merchant exporter:
The dispute also involved the fact that the goods were exported through a merchant exporter, not directly by the applicant. The Revenue argued that this action disqualified the applicant from the benefits of Notification No.93/2004-Cus. However, the Tribunal found no explicit condition mandating direct export by the importer in the relevant provisions. The Tribunal considered the nature of the export, the signing of ARE-1 by both the applicant and the merchant exporter, and the absence of any prohibition on export through a merchant exporter in the notification or relevant policies.

Application for waiver of predeposit of dues:
Lastly, the applicant had filed an appeal before the Tribunal along with an application for waiver of predeposit of dues arising from the impugned order. The Tribunal, after considering the arguments from both sides and various factors, including the absence of explicit conditions mandating direct export by the importer, decided to waive the requirement of predeposit of dues for the admission of the appeal. A stay on the collection of dues was ordered during the pendency of the appeal.

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