2013 (5) TMI 382 - AT - Customs

Imports of various consignments - restriction on Modvat / Cenvat before availing the benefit of Notification No. 203/92 onus to prove Held that - There is nothing on record to indicate that the appellant had availed the Cenvat credit of the inputs/capital goods for the manufacturing of the goods which were exported. - Tribunal in the case of Auto Ignition Ltd. has held that evidence has to be brought on record by the department to refute the claim that no modvat credit has been availed by the appellants on inputs as well as capital goods. This judgment was carried in appeal by the Revenue before the Apex Court and the Apex Court on identical set of facts has upheld the order of the Tribunal 2008 (4) TMI 43 - SUPREME COURT - Decided in favor of assessee.

Summary

Issues:
Violation of conditions of Notification No. 203/92, duty exemption eligibility, service of show cause notice, suppression of facts, Cenvat credit availed, burden of proof on department.

Violation of Conditions of Notification No. 203/92:
The appellant imported HDPE granules/PP granules availing the benefit of Notification No. 203/92 but failed to make the required declaration before the Assistant Commissioner of Customs. The appellant was charged for violating condition V(a) of the notification by not justifying non-availment of Cenvat credit and lack of evidence of goods exported to fulfill export obligation. The adjudicating authority confirmed the demand, imposed interest, and confiscated goods due to non-cooperation from the importer.

Service of Show Cause Notice and Suppression of Facts:
The appellant claimed non-receipt of the show cause notice dated 19-8-1997, arguing that the demand is time-barred without allegations of fact suppression. The Tribunal found no evidence of the notice being served and emphasized the necessity of proving deliberate suppression for invoking Section 28 of the Customs Act, 1962. Citing precedents like Sewing Systems Pvt. Ltd., the Tribunal held that proceedings initiated under unserved notices cannot be sustained.

Cenvat Credit Availed and Burden of Proof:
The demand was based on the appellant allegedly availing Cenvat credit on inputs, making them ineligible for Notification No. 203/92 benefits. However, the Tribunal found no evidence of Cenvat credit availed on inputs used in manufacturing exported goods. Referring to the case of Auto Ignition Ltd., the Tribunal emphasized the department's burden to prove Cenvat credit availed. The Tribunal dismissed the appeal, setting aside the impugned order and allowing the appeal with consequential relief.

This detailed analysis of the judgment from the Appellate Tribunal CESTAT, Ahmedabad highlights the issues related to the violation of notification conditions, service of show cause notice, suppression of facts, Cenvat credit availed, and burden of proof on the department. The Tribunal's decision was based on legal precedents and the appellant's failure to provide necessary declarations and evidence, ultimately leading to the appeal being allowed with consequential relief.