2015 (12) TMI 472 - AT - Customs

Denial of the benefit of duty exemption - Whether the modvat credit was availed or not by the holder of the license - condition Notification No. 203/92-Cus dt. 19.05.1992 - Held that - Main ground of appeal, that is reliance on the case of Hico Enterprises does not sustain as the matter was settled in favour of the transferees in that case. The judgments cited in the case of Special Steels Ltd., Friends Trading Co. and Tata Iron and Steel Co. Ltd. were considered by us in the case of Nidhi Textile. This judgment was passed after considering all the judicials pronouncements. In the present case before us we also find that the facts of Tata Iron & Steel Co. Ltd. case are at variance from the facts of the present case. In the Tata Iron & Steel Co. Ltd. case it is clear from the judgment that there was deliberate suppression of the fact that modvat credit had been availed and, therefore, the Hon ble Apex Court held that the extended period of demand would be applicable even to the transferee of the license. However in the present case as already noted above, no evidences are forthcoming from the records that there was availment of modvat credit. In the circumstances there is no merit in the grounds of appeal. - Decided against Revenue.

Summary

Issues:
Appeal against Order denying duty exemption on the basis of modvat credit non-availment; Burden of proof on transferee; Verification of modvat credit; Reliance on previous judgments; Remand to adjudicating authority.

Analysis:
The appeal was against an Order denying duty exemption due to alleged non-fulfillment of conditions regarding modvat credit. The adjudicating authority held that once a license is endorsed as transferable, the burden of proving non-availment of modvat credit does not lie with the transferee. The Revenue contended that the transferee must prove compliance, citing relevant judgments. The counsel for the respondent argued that the license holders had intimated non-availment of modvat credit, and reliance on a specific case was not valid due to a subsequent favorable decision. The Tribunal noted the lack of departmental verification on modvat credit and deemed the show cause notice vague. Refusing remand due to the age of the imports, the Tribunal found the appeal lacking merit. Previous judgments were considered, with a distinction made based on the presence or absence of deliberate suppression of facts regarding modvat credit. As no evidence of credit availment was found in the present case, the appeal was rejected, upholding the impugned order.