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2015 (4) TMI 598 - AT - CustomsMisuse of advance licences - appellant has no manufacturing facilities for that part of the period. - goods manufactured through their job worker - Benefit of duty exemption under Customs Notification Nos.30/97, dated 01.04.1997 and 48/99, dated 29.04.1999 - Manufacture and export of S.S.Utensils - Held that - It was observed by the Adjudicating authority that if the appellant had declared the job workers to the DGFT and got the licences amended to incorporate the job workers and took steps to fulfill the obligation under the Customs notification, he would be eligible to avail the benefit of exemption notification. It is stated that the Licensing authority may have the power to condone the non-fulfilment of condition relating to declaration of job workers not declared in the application. We find that the Licensing authority certified the fulfillment of export obligation and in this context, the submission of the learned Advocate that the Policy permitted job work is required for examination. In our considered view, the stand taken by the appellant that they manufactured the goods through their job worker and permitted by Policy is required to be verified and, thereafter, it should be decided as to whether they are eligible to get benefit under the notification - matter remanded back - Decided in favour of assessee.
Issues:
1. Setting aside of the CESTAT Final Order by the High Court and remittance to the Tribunal for fresh consideration. 2. Denial of duty exemption benefit under Customs Notification Nos. 30/97 and 48/99 due to alleged violation of conditions. 3. Discrepancy regarding manufacturing facilities and job worker usage by the appellant. 4. Interpretation of the Policy regarding job work and fulfillment of export obligation under the Customs notification. Issue 1: Setting aside of the CESTAT Final Order by the High Court and remittance to the Tribunal for fresh consideration: The High Court set aside the CESTAT Final Order due to the failure of the CESTAT to consider that the Customs Department had the authority to decide issues related to duty exemption, not the Director-General of Foreign Trade. The High Court emphasized that the Customs authorities are responsible for determining duty exemption entitlement under Section 111(o) of the Customs Act, distinct from the role of the Joint Director General of Foreign Trade in import licensing matters. The High Court directed the CESTAT to reconsider the case on its merits and in accordance with the law. Issue 2: Denial of duty exemption benefit under Customs Notification Nos. 30/97 and 48/99 due to alleged violation of conditions: The appellant was engaged in the manufacture and export of Stainless Steel Utensils under Advance Licences with actual user conditions. However, the Directorate of Revenue Intelligence (DRI) found discrepancies in the fulfillment of export obligations, leading to the denial of duty exemption benefit under the relevant Customs notifications. The Adjudicating authority confirmed a substantial duty demand along with penalties. The Tribunal had earlier set aside this order based on the certification of export obligation fulfillment by the Licensing authority. Issue 3: Discrepancy regarding manufacturing facilities and job worker usage by the appellant: The appellant claimed that due to unavoidable circumstances, goods were manufactured through a job worker during the relevant period, which is permissible under the Policy. However, the Adjudicating authority highlighted that the appellant did not declare the job worker to the Directorate General of Foreign Trade (DGFT) and did not fulfill obligations under the Customs notification. The Adjudicating authority suggested that if the appellant had declared the job worker to the DGFT and amended the licenses accordingly, they could have availed the duty exemption benefit. Issue 4: Interpretation of the Policy regarding job work and fulfillment of export obligation under the Customs notification: The Tribunal remitted the matter back to the Adjudicating authority to reexamine the case considering the appellant's claim of manufacturing through a job worker as permitted by the Policy. The Adjudicating authority was directed to verify the appellant's eligibility for job work under the Policy, fulfillment of notification conditions, and to consider all submissions made by the Authorized Representative. The Tribunal emphasized the need for a thorough examination of the appellant's manufacturing process and compliance with the notification conditions before deciding on the eligibility for duty exemption benefits. This comprehensive analysis of the judgment addresses the key issues involved, the legal interpretations made by the High Court and the Tribunal, and the directions given for the fresh consideration of the case.
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