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2018 (7) TMI 791 - AT - CustomsDEEC Advance License Scheme - N/N. 203/92-Cus dated 19.5.1992 - it was alleged that the appellants have violated the conditions of notification by availing input stage credit on the inputs used for the export products - Held that - A coordinate bench of the tribunal in the case of Polynova Industries 2009 (1) TMI 732 - CESTAT MUMBAI while dealing with identical circumstances placed reliance in the case of Shasun Drugs & Chemicals v. CESTAT Chennai 2004 (11) TMI 119 - HIGH COURT OF JUDICATURE AT MADRAS and held that reversal of credit done partly before and partly after the cut-off date 31-1-97 prescribed by the Amnesty Scheme is in accordance with the scheme. In the case of appellant in many cases of exports no credit was availed. In all cases where the credit was availed the same was reversed long before the cutoff date. Except in few cases interest too was paid before the deadline. Appeal allowed - decided in favor of appellant.
Issues:
Confirmation of demand of customs duty based on violation of conditions of DEEC Advance License under Notification No. 203/92-Cus dated 19.5.1992 by availing input stage credit on export products. Analysis: The appeal was filed against the confirmation of demand of customs duty by M/s Inter Continental (India) (Now known as M/s Adani Enterprises. Ltd.) for allegedly violating the conditions of DEEC Advance License under Notification No. 203/92-Cus dated 19.5.1992, which permitted duty-free import of goods for manufacturing finished products. The license required the export obligation to be fulfilled without availing input stage credit or certain facilities, or claiming drawback. Show-cause notices were issued, alleging input stage credit availed on export products, leading to demands being confirmed. The Tribunal found objections raised by Revenue on three out of eight advance licenses granted, necessitating verification of facts regarding the reversal of MODVAT credit and interest payment within the prescribed deadline of the Amnesty Scheme. Upon re-adjudication, the Commissioner confirmed the demand, citing the decision of the Hon'ble Apex Court in Bharati Telecom Ltd. and rejecting reliance on other judgments. The appellant argued that the reversal of MODVAT credit was done before the deadline, with interest paid slightly after the cutoff date. Specific instances were highlighted to demonstrate compliance with the conditions of the license. The appellant contended that where no MODVAT credit was availed, and export obligations were met, there should be no dispute regarding non-compliance with the notification. The Revenue supported the impugned order, advocating adherence to the decision of the Hon'ble Apex Court in Bharati Telecom Ltd. The Tribunal considered various precedents, including the decisions in Shasun Drugs & Chemicals and Polynova Industries, which interpreted the Amnesty Scheme differently. It was noted that the entire credit was reversed before the cutoff date, with a minor delay in reversing interest. Relying on past decisions and the circumstances of the case, where credit was reversed before the deadline and interest was paid shortly after, the appeal was allowed, emphasizing that a slight delay in interest reversal should not disentitle the assessee from benefiting under the Amnesty Scheme. In conclusion, the Tribunal allowed the appeal, emphasizing that compliance with the conditions of the license, including timely reversal of credit and payment of interest, should be viewed leniently in cases where export obligations were fulfilled and no substantial non-compliance was evident. *(Pronounced in Court on 25.05.2018)*
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