2016 (12) TMI 10 - AT - Customs

Eligibility of Notification No.203/92-Cus dated 19.05.92 for import of goods under Value Based Advance Licencing Scheme - availing of MODVAT credit - Held that - though initially MODVAT credit was availed but subsequently reversed and interest was also paid and a certificate was produced before the Commissioner (Appeals). The Learned Commissioner, in spite of submission of proof of reversal of MODVAT credit and payment of interest, denied the exemption. The Ld. Commissioner has diverted from the show cause notice and original order in as much as he given conclusive finding that the certificate was given by the Superintendent and not by the Assistant Commissioner, therefore the same was not accepted. We absolutely disagree with this finding of the Learned Commissioner for the first reason that there was no such allegation in the show-cause notice and secondly, also no findings in the original order in this regard. Hence the Commissioner was not supposed to go into the issue which is not arising from show-cause notice and adjudication order. There is no dispute that the appellant reversed MODVAT credit and paid the interest. In our considered view with these payments, the condition V(A) of notification No.203/92-Cus has been complied with. Therefore both the authorities are wrong in confirming the demand - appeal allowed - decided in favor of appellant.

Summary

Issues involved: Eligibility of Notification No.203/92-Cus for import of goods under Value Based Advance Licencing Scheme.

Analysis:

1. The case revolved around the eligibility of Notification No.203/92-Cus for the import of goods under the Value Based Advance Licencing Scheme. The appellant was issued a show-cause notice alleging that they violated the condition of the notification by availing MODVAT credit at the time of exporting goods under the scheme. The adjudicating authority confirmed the charges based on an amnesty scheme requiring not only the reversal of MODVAT credit but also the deposit of interest. Despite the appellant's submission of proof of reversing MODVAT credit and paying interest, the Commissioner (Appeals) denied the exemption, deviating from the original order and show-cause notice. The appellate tribunal disagreed with the Commissioner's finding, emphasizing that the appellant had indeed complied with the conditions by reversing MODVAT credit and paying interest, thus fulfilling the requirements of the notification.

2. The tribunal observed that the demand was confirmed solely on the basis of the appellant availing MODVAT credit, overlooking the subsequent reversal and payment of interest along with the production of a certificate from the jurisdictional superintendent. The tribunal criticized the Commissioner for introducing a new aspect regarding the certificate's source, which was not part of the show-cause notice or original order. Emphasizing that the appellant had met the conditions of Notification No.203/92-Cus by reversing MODVAT credit and paying interest, the tribunal concluded that both authorities erred in confirming the demand. Consequently, the tribunal set aside the impugned order and allowed the appeal, deeming the demand unsustainable in light of the appellant's compliance with the notification's conditions.