2016 (8) TMI 183 - AT - Customs

Import of goods against DEEC license - Denial of benefit of Notification No. 203/92-Cus - The benefit of said notification was sought to be denied on the ground that the goods exported for procuring the said license were manufactured by availing the benefit of input stage credit. Clause (V)(a) of Notification No. 203/92-Cus prohibited availment of input stage credit in respect of such goods. - Held that - even if the third party exporter had availed input stage credit, the benefit of Notification No. 203/92 cannot be availed. The appellants has been the declaration as prescribed under the Schedule of the Notification to this aspect while applying for the said license. The appellant has failed to substitute the declaration made by them for obtaining this certificate. The appellant has, at no stage, given any evidence that no credit has been availed. While it is correct that when allegation is made by a person, the same is to be proved by that person. However, in this case, there is a specific declaration by the appellant that they have followed the conditions of the notification which include that the goods exported have not been availed the input stage credit. The appellants have failed to substitute the said declaration by providing evidence. Demand confirmed with interest - However, penalty u/s 114A set aside - Decided partly in favor of assessee.

Summary

Issues:
1. Denial of benefit under Notification No. 203/92-Cus for imported goods due to alleged availing of input stage credit in manufacturing process.
2. Lack of evidence in show-cause notice regarding availing of credit by third party exporters.
3. Appellant's argument against availing credit and responsibility of Revenue to provide evidence.
4. Appellant's contention on interest rate and penalty imposition.
5. Invocation of extended period in the case.

Analysis:
The judgment by the Appellate Tribunal CESTAT Mumbai dealt with the denial of benefits under Notification No. 203/92-Cus to M/s Atul Ltd. for imported goods allegedly manufactured by availing input stage credit. The show-cause notice lacked evidence on the availing of credit by third-party exporters, leading to a key contention in the case. The appellant argued against availing the credit and emphasized the Revenue's duty to produce evidence regarding the same. Additionally, the appellant highlighted the reversal of duty and disputed the interest rate demanded, citing a Supreme Court decision for a lower interest rate. The confusion surrounding penalty imposition under Section 114A, not invoked in the show-cause notice, was also raised by the appellant.

Upon analysis, the Tribunal found that even if a third party had availed input stage credit, the benefit of the notification could not be extended. The appellant's failure to provide evidence contrary to their declaration under the notification led to the denial of benefits. The Tribunal differentiated the case from the Supreme Court decision on interest rate reduction, emphasizing the extraordinary circumstances in that case. Consequently, the benefit could not be extended to the appellant based on the cited precedent. The Tribunal also noted the discrepancy in penalty imposition under Section 114A without its invocation in the show-cause notice, leading to the decision to not sustain the penalty.

In conclusion, the appeal was partially allowed by the Tribunal, addressing the issues raised by the appellant regarding the denial of benefits, interest rate, and penalty imposition. The judgment provided a detailed analysis of the legal provisions and precedents, emphasizing the importance of evidence and adherence to notification conditions in such cases.