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2016 (3) TMI 221 - AT - CustomsEntitlement of benefit - Exemption Notification No. 30/97 dt. 1.4.1997 and 48/99 dt. 29.4.99 as amended availed for import of duty-free materials under Advance Licence as Actual user manufacturer-exporter - Appellants obtained Advance Licence with actual user conditions declaring themselves as manufacturing exporter for import of SS coils/sheets by availing the benefits of the above said Notifications. But Department contended that it misused the advance licence and contravened the Customs Notification by diverting the duty free imported raw materials instead of utilizing the same for manufacture of resultant export products, hence not entitled for benefit - Held that by following the Hon ble High Court decision in the case of CC Vs CESTAT Chennai/Gaur Impex 2009 (4) TMI 83 - MADRAS HIGH COURT which was upheld by Hon ble Supreme Court, appellants are not eligible for the benefit of exemption notifications 38/97, 51/2000 and 48/99 as amended on the goods imported under the said advance licences as the appellants had no factory for manufacturing finished goods at the declared premises and have not used the SS coils/sheets imported under DEEC Advance Licences and cleared without duty under customs exemption Notification 30/97 as amended by 51/2000, 48/99 as amended for manufacture of finished goods exported. Therefore, the benefit should not be granted and the demand of customs duty and interest and confiscation, and penalty upheld. - Decided against the appellant
Issues Involved:
1. Change of cause title. 2. Admissibility of additional grounds in the appeal. 3. Misuse of Advance Licence and contravention of Customs Notification. 4. Denial of duty exemption and imposition of penalties. Issue-Wise Detailed Analysis: 1. Change of Cause Title: The Revenue filed a miscellaneous application to change the respondent's name in the cause title from "Commissioner of Customs, Seaport-Export, Custom House, Chennai-600 001" to "Commissioner of Customs, Chennai IV Commissionerate, Custom House, Chennai-600 001" due to the implementation of new Commissionerates. The Tribunal allowed this application and directed the Registry to update the respondent's name in all future proceedings. 2. Admissibility of Additional Grounds in the Appeal: The assessee filed a miscellaneous application to include additional grounds in the appeal memorandum. The Tribunal allowed this application, permitting the inclusion of the additional grounds for consideration. 3. Misuse of Advance Licence and Contravention of Customs Notification: The appellants, M/s. Ashok Enterprises, obtained Advance Licences for importing SS coils/sheets duty-free under Customs Notification Nos. 30/97 and 48/99. Based on intelligence, the Directorate of Revenue Intelligence (DRI) investigated and found that the appellants did not use the imported materials for manufacturing export products but instead diverted them. The premises declared by the appellants were found to be in possession of another entity, "M/s. Shri Krishna Polishing Works," and the appellants admitted to not having any rental agreement or manufacturing facility at the declared address. Consequently, a show cause notice was issued, and the Commissioner of Customs (Exports), Chennai, held that the appellants' exports were inadmissible towards the export obligation, denied the duty exemption, and imposed penalties. 4. Denial of Duty Exemption and Imposition of Penalties: The Commissioner of Customs (Exports), Chennai, in the impugned order, denied the benefit of duty exemption claimed under the relevant Customs Notifications and demanded duty and interest. The Commissioner also ordered the enforcement of bonds/bank guarantees, confiscated the imported goods, and imposed fines and penalties. The Tribunal initially allowed the appellants' appeal based on the DGFT's order but the High Court set aside the Tribunal's order and remanded the case for de novo hearing. Upon re-evaluation, the Tribunal found that the appellants did not have a manufacturing unit at the declared premises and did not use the imported materials for manufacturing export products. The Tribunal upheld the denial of duty exemption, the demand for duty and interest, the confiscation of goods, and the imposition of penalties as ordered by the adjudicating authority. Conclusion: The Tribunal upheld the adjudicating authority's order, confirming that the appellants violated the conditions of the Customs Notifications and were not entitled to the duty exemptions. The appeal filed by the appellants was rejected, and the adjudication order was upheld in its entirety.
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