2016 (11) TMI 849 - AT - Customs

Denial of advance licence scheme - MODVAT credit - Rule 57 A of the Central Excise Rules, 1944 - violation of condition V(A) of N/N. 203/92-Cus dated 19/5/1992 - Held that - as per condition V(A), the only condition is that input stage modvat credit should not be availed. In the present case by reversing the modvat credit condition of V(A) of notification stands complied with. Even though certificate was signed by Jurisdictional superintendent that does not alter the status of reversal of modvat credit by the appellant, which has not been disputed by both the lower authorities. In view of the fact that appellant have reversed the modvat credit and the same was endorsed in AR4 as well as on the basis of certificate issued by the Jurisdictional superintendent, we do not find any reason why the benefit of exemption notification no. 203/92-cus should not be allowed. As per our above discussion, we are of the view that appellant has complied with the condition V(A) of the Notification, accordingly they entitle for the exemption notification - appeal allowed.

Summary

Issues involved:
Violation of condition V(A) of Notification No. 203/92-Cus dated 19/5/1992 by availing input stage Modvat credit under Rule 57 A of the Central Excise Rules, 1944 leading to the denial of the advance licence scheme.

Analysis:

The appellant was accused of breaching condition V(A) of Notification No. 203/92-Cus by utilizing input stage Modvat credit under Rule 57 A of the Central Excise Rules, 1944. The Adjudicating Authority upheld the demand for custom duty, rejecting the appellant's claim under the advance licence scheme. The Ld. Commissioner(Appeals) also supported this decision.

During the proceedings, the appellant's counsel highlighted the endorsement on the shipping bill regarding the reversal of Cenvat credit for relevant exports. The appellant had received a certificate from the Jurisdictional Range Superintendent confirming the reversal of Cenvat credit for five consignments, which was disregarded by the lower authorities due to a requirement for the certificate to be issued by an officer of the rank of Asst. Commissioner of customs as per an amnesty circular dated 10/1/1997. The appellant argued that the condition of the notification was met as they reversed the credit on the date of AR 4 issuance.

The Revenue's representative reiterated the findings of the impugned order, opposing the appellant's arguments.

Upon careful consideration, the Tribunal found that although the appellant had initially availed Modvat credit under Rule 57A, they had indeed reversed it at the time of exporting the goods, as evidenced by the endorsement on AR4 and the certificate from the jurisdictional superintendent. The Tribunal disagreed with the rejection of the certificate based on the rank of the issuing officer, emphasizing that the key condition of not availing input stage modvat credit had been met by the appellant. The Tribunal concluded that the appellant complied with condition V(A) of the Notification, entitling them to the exemption. Consequently, the impugned order was set aside, and the appeal was allowed with any necessary consequential relief as per the law.

The judgment was pronounced in court on 5/10/16.