2004 (1) TMI 193 - AT - Customs

Summary

Issues:
1. Denial of exemption benefit on imported goods due to alleged incorrect declaration.
2. Confirmed duty and penalties imposed on both licence-holder and transferee.
3. Interpretation of eligibility for Custom Exemption notification in cases of transferees.
4. Conflict between different views on eligibility for exemption benefit.
5. Referral of legal question to Larger Bench of the Tribunal for resolution.

Analysis:
1. The judgment revolves around the denial of duty exemption benefit on goods imported in 1994 due to an alleged incorrect declaration regarding Modvat availment. The show cause notice proposed to deny the exemption benefit based on this allegation, leading to the confirmation of duty and penalties on both the licence-holder and the transferee.

2. The Tribunal noted the existence of two conflicting views on the eligibility of transferees for Custom Exemption notification benefits. One view, exemplified in the case of Good Luck Industries, grants exemption to transferees, while the other view, as seen in cases like Special Steels Ltd. and Cosper Impex Pvt. Ltd., denies the benefit even if the condition is impossible to perform. This conflict necessitated a referral of the legal question to the Larger Bench of the Tribunal for resolution.

3. Considering the divergent interpretations, the Tribunal found it necessary to seek clarification on whether the legal maxim Lex non Cogit ad impossibilia would entitle a valid recognized transferee to the benefit of DEEC exemption notifications. This question seeks to determine if the transferee or the original licensee is responsible for satisfying the conditions of the notifications, especially in cases where performance is impossible.

4. The judgment highlights the importance of resolving the conflicting views to ensure consistency and clarity in the application of liability concerning the conditions of the DEEC notification. By referring the matter to the Hon'ble President of CESTAT for orders on the reference, the Tribunal aims to address the legal question and provide guidance on the eligibility of transferees for exemption benefits under the Custom Exemption notification.