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Issues:
1. Duty demand and penalty imposed on importers for contravention of Customs Act. 2. Denial of exemption under Notification No. 203/92 for imports made against a specific license. 3. Allegations of contravention of Customs Act and violation of Foreign Trade Act provisions regarding availing Modvat credit. 4. Gross denial of principles of natural justice in the adjudication process. Analysis: 1. The appeal before the Appellate Tribunal concerned the duty demand, penalty, and confiscation of goods imported under an Advance Import Licence. The Commissioner had determined duty demand, ordered confiscation (which was not possible due to unavailability of goods), and imposed a penalty of Rs. 25 lakhs on the importers. The exemption granted under Notification No. 203/92 was denied for imports made against a specific license. The demand of Rs. 60,00182/- along with interest was confirmed under the Customs Act, and a penalty of the same amount was imposed under relevant provisions. 2. The appellants were issued a show cause notice for allegedly contravening Customs Act provisions by importing goods without availing input stage credit (Modvat) on inputs used in manufacturing goods exported against a different license. This contravention was said to violate specific conditions of Notification No. 203/92-Cus. and provisions of the Foreign Trade Act. The Commissioner found that the appellants did not fulfill the DEEC Scheme requirements, leading to the denial of claimed exemptions and subsequent determinations of confiscation, duty demand, and penalties. 3. During the proceedings, the learned Senior Advocate highlighted that the Central Excise Officers were required to verify if goods supplied and exported against the license had availed Modvat credit. The Commissioner noted that the manufacturers denied supplying goods to the exporters, indicating non-compliance with the DEEC Scheme requirements. The adjudicator based the determinations on this information, leading to the imposition of penalties and duty demands. 4. The Tribunal observed a gross denial of principles of natural justice in the adjudication process. Despite the fixing and subsequent adjournment of a hearing date, the appellants were not provided with an opportunity to produce material documents to substantiate their defense. The Commissioner's reliance on information received from Central Excise Officers without disclosing it to the appellants was considered a violation of natural justice. Consequently, the Tribunal set aside the order, remanded the matter for fresh adjudication, and emphasized the importance of following natural justice principles in the proceedings.
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