2004 (11) TMI 236 - AT - Customs

Summary

Issues:
1. Allegations of availing Modvat credit on inputs under duty free material import licenses.
2. Misdeclaration of export goods.
3. Sale of exempt material to supporting manufacturers.
4. Compliance with export obligations under Notification No. 203/92 and 204/92.

Detailed Analysis:
1. The first issue pertains to the allegations of availing Modvat credit on inputs under duty free material import licenses. The Commissioner found that the importer reversed the Modvat credit as per the amnesty scheme, along with interest, totaling Rs. 41,60,176. Despite attempts to verify the reversal, the Central Excise Officers did not respond. The Commissioner concluded that the importers complied with the amnesty scheme conditions, and thus, the demand for customs duty on raw material imported under VABAL licenses was not valid.

2. The second issue involves the misdeclaration of export goods by the importer. The Commissioner found that the importer misdeclared stainless steel bright bars as stainless steel bars and rods to align with Standard Input Output Norms (SION). This issue was not a basis for demanding customs duty as the misdeclaration did not impact the fulfillment of export obligations.

3. The third issue concerns the sale of exempt material to supporting manufacturers. The Commissioner determined that the sale of imported material to supporting manufacturers before fulfilling export obligations was a technical infraction. However, since the Modvat credit was reversed and export obligations were met, the Commissioner did not find a contravention of statutory provisions in this regard.

4. The final issue revolves around the compliance with export obligations under Notification No. 203/92 and 204/92. The Commissioner observed that the importers fulfilled export obligations under VABAL licenses and were in the process of completing obligations under other licenses. The Commissioner emphasized that the importers had complied with the provisions of the notifications, and there was no evidence to suggest otherwise.

In conclusion, the Tribunal upheld the Commissioner's order, noting that the importers had substantively complied with the requirements of the duty free material import licenses. The Tribunal found no infirmity in the Commissioner's decision, as the importers had reversed Modvat credit, fulfilled export obligations, and operated within the framework of the notifications. The appeals by the Revenue were rejected, affirming the Commissioner's order.