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2017 (12) TMI 905 - HC - CustomsCENVAT credit of CVD availed by debiting and adjusting in DEPB account - denial on the ground that in terms of EXIM policy 20022007 and in particular para 4.3.5 thereof where additional customs duty was adjusted from DEPB, no benefit of CENVAT or draw back would be available - Held that - as per the SCN, the petitioner had wrongly availed the CENVAT credit. This provision was made in the earlier Foreign Trade Policy of 200207. However later in the new policy, by virtue of amendment in the policy, such benefit was made available again. Circular dated 21.10.2004, of course, provided that such benefit would be available with respect to licenses issued under the new policy - whether in case of the petitioner, all the licenses were issued under the new policy or not is a question of fact, which requires examination - matter placed on remand for re-examination - petition allowed by way of remand.
Issues:
Challenge to order of Principal Commissioner demanding additional customs duty and cess on imports made by the petitioner without payment of customs duty under Customs Notification no.96/2004; Opposing show cause notices citing amendment in Foreign Trade Policy permitting benefits to importers; Commissioner of Customs confirming duty demand based on notification dated 21.10.2004; Petitioner producing licenses issued under new policy; Petitioner's plea rejected by Commissioner; Petitioner's right to produce evidence and raise legal contentions not considered; Matter remitted back to Adjudicating Authority for fresh consideration. Analysis: The petitioner challenged an order passed by the Principal Commissioner demanding additional customs duty and cess on imports made without payment of customs duty under Customs Notification no.96/2004. The show cause notices required the petitioner to explain why wrongly availed CENVAT credit of CVD should not be recovered with interest and penalty. The petitioner opposed the notices, citing the amendment in the Foreign Trade Policy allowing such benefits to importers under notifications no.96/2004 and 59/2004. The Commissioner confirmed the duty demand, stating that the amended policy applied only to licenses issued under the new Foreign Trade Policy, not the previous policies. The petitioner produced licenses issued under the new policy during the adjudication proceedings. The petitioner's counsel argued that all licenses were issued under the new policy, and the exclusion clause in the circular dated 21.10.2004 did not apply. The Commissioner rejected this plea, stating that original licenses needed to be produced to verify their issuance under the old or new policy. The petitioner was not given an opportunity to present material and contentions supporting their claim, which was never raised in the show cause notice or adjudication proceedings. The department opposed the petition, highlighting that the judgments cited by the petitioner did not consider the applicability of the circular dated 21.10.2004. The High Court remitted the matter back to the Adjudicating Authority for fresh consideration. The Court noted that the petitioner was deprived of an important right as they were not given an adequate opportunity to produce evidence and raise necessary legal contentions. The impugned order was set aside, allowing the petitioner to place additional evidence in support of the contention that all licenses were issued under the new policy. The Court kept all contentions open for further consideration during the fresh disposal proceedings. The petition was disposed of, emphasizing the petitioner's right to present relevant evidence and legal arguments.
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