2019 (8) TMI 226 - HC - Customs

Exemption of Customs Duty on import of raw sugar which was manufactured after refining into white sugar by the assessee and was finally exported through the third party - benefit of N/N. 43/2002-Cus. - Clarification by CBEC vide Circular dated 22.01.2007 - anvil of the Foreign Trade Policy for the period from 01.09.2004 to 31.03.2009 - HELD THAT - The learned Tribunal has rightly held that the assessee could not be denied the benefit of exemption under the said Notification in view of the clarifications issued by the Board and the rigor of the condition No. v in the said Notification could not be applied to the assessee in the present case merely because the third party, viz., Merchant Exporter, availed the rebate of the export duty paid against the export made by it. The Board, in the series of Corrigendums and Clarifications has put the position of law beyond pale of doubt and therefore, the Revenue cannot be permitted to argue against their own Circulars and Clarifications. We wondered whether the appeal filed by the appellant/Revenue in the face of these Clarifications issued by the Board, itself could at all be entertained or not. But, since the learned counsel for the appellant/Revenue urged the point on the basis of Foreign Trade Policy, we heard the arguments of the learned counsel for the appellant/Revenue on merits also. But, we find to our dismay that such a point has not even been raised by the appellant/Revenue before the Tribunal or at any point of time except before us for the first time - The Advance License issued in favour of the assessee, admittedly, was issued after the date of Corrigendum issued by the Central Government on 17.05.2005 and this fact not being in dispute, we are afraid that the point raised by the learned counsel for the appellant/Revenue even it it was to be entertained, does not have any merit in it. Appeal dismissed.

Summary

Issues:
Appeal under section 130A of the Customs Act, 1962 regarding exemption on Customs Duty for import of raw sugar, interpretation of Corrigendum No.PN.9/2002 and Notification No.43/2002-Cus, clarification by CBEC, validity of Corrigendum and Circulars, impact of Foreign Trade Policy on exemption eligibility, third-party export through Merchant Exporter, applicability of Advance License and Advance Authorisation Scheme.

Analysis:
The High Court of Madras heard an appeal by the Revenue challenging a CESTAT order granting exemption to the assessee on Customs Duty for importing raw sugar refined into white sugar and exported via a Merchant Exporter. The Tribunal's decision was based on the interpretation of Corrigendum No.PN.9/2002 and Notification No.43/2002-Cus, along with a CBEC Circular clarifying the conditions for availing benefits under the Advance Licence Scheme. The Tribunal found merit in the assessee's compliance with the conditions as per the Circular, leading to exemption eligibility.

The Revenue contended that the Foreign Trade Policy from 01.09.2004 to 31.03.2009 restricted exemption if the export was made through a third party, arguing that the assessee had availed rebate through the Merchant Exporter. However, the respondent's counsel cited Board's Corrigendums and Clarifications, emphasizing that the Advance License was issued post the relevant Corrigendum, allowing the rebate without violating Rule 18. The Tribunal's reliance on the Circular dated 22.01.2007 was supported, highlighting that export via Merchant Exporter was permitted by Circular No.120/1995-Cus.

The Court upheld the Tribunal's decision, emphasizing that the Board's Clarifications and Corrigendums clarified the law, preventing the Revenue from challenging its Circulars. The Court questioned the validity of the Revenue's appeal given the Board's clear position, and dismissed the appeal on the grounds that the Foreign Trade Policy provision cited by the Revenue did not apply to the Advance License issued to the assessee post the relevant Corrigendum. The Court found no merit in the Revenue's arguments and dismissed the appeal, affirming the exemption for the assessee and concluding the Civil Miscellaneous Appeal without costs.