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2008 (11) TMI 138 - AT - Central ExciseEOU advance DTA sales with Development Comissioner s permission - Denial of benefit of Notification No. 2/95-CE - appellants failed to fulfill the conditions of the Bond executed by them at the time of clearance to Domestic Tariff Area (DTA) under Notification No. 2/95 being advance clearance against future export - appellants had failed to achieve the prescribed value addition/KFTZ - demand of duty consequential to denial of the benefit of Notification No. 2/95-C.E. is justified
Issues Involved:
1. Eligibility for the benefit of Notification No. 2/95-CE. 2. Fulfillment of export obligations. 3. Validity of the permission granted by the Development Commissioner. 4. Applicability of Notification No. 83/90-Cus. 5. Imposition of redemption fine and penalty. 6. Limitation period for issuing the show cause notice. Detailed Analysis: 1. Eligibility for the Benefit of Notification No. 2/95-CE: The primary issue was whether the appellants were eligible for the benefit of Notification No. 2/95-CE for their DTA clearances made after obtaining permission from the Development Commissioner. The appellants argued that they had fulfilled all conditions under the said notification, including the export obligations if deemed export value was included. However, the Development Commissioner had concluded that the appellants failed to fulfill the conditions, thereby making them ineligible for the notification's benefits. 2. Fulfillment of Export Obligations: The appellants contended that they had met the export obligations, including deemed exports. The Development Commissioner, however, determined that the appellants had not exported any physical goods and only engaged in deemed exports, leading to a failure in meeting the export obligations. The Tribunal upheld this finding, stating that the Development Commissioner's conclusion was final and binding. 3. Validity of the Permission Granted by the Development Commissioner: The permission for advance DTA sales was subject to future export entitlements. The Development Commissioner's permission letter explicitly stated that the DTA sales were allowed subject to adjustment against future entitlements. Since the appellants failed to meet these entitlements, the permission was rendered null and void, leading to the enforcement of the bond and the demand for differential duty. 4. Applicability of Notification No. 83/90-Cus: The appellants sought the benefit of Notification No. 83/90-Cus, which provides concessional rates for certain goods. The Tribunal found that this notification was conditional and that the claim for its benefit should have been made at the time of importation. The Tribunal did not find it appropriate to extend this benefit retrospectively. 5. Imposition of Redemption Fine and Penalty: The Commissioner had imposed a redemption fine of Rs. 10 lakhs and a penalty of Rs. 4.5 lakhs. The Tribunal upheld these penalties, noting that the appellants had failed to fulfill their export obligations and misused the facilities extended for export promotion. 6. Limitation Period for Issuing the Show Cause Notice: The appellants argued that the show cause notice issued on 17/22-4-1998 was barred by limitation since the goods were cleared during May to July 1996 based on a valid permission letter. The Tribunal did not find merit in this argument, as the Development Commissioner had already concluded the appellants' failure to meet export obligations, which justified the timing of the notice. Separate Judgments: - Member (Technical): Upheld the Commissioner's order, rejecting the appeal and confirming the duty demand, fine, and penalty. - Member (Judicial): Proposed remanding the case for de novo adjudication concerning duty determination, setting aside the fine and penalty, and considering deemed exports. - Third Member (Judicial): Concurred with the Member (Technical), leading to the final decision to reject the appeal. Final Order: The appeal was rejected based on the majority decision, confirming the duty demand, fine, and penalty imposed by the Commissioner.
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