2018 (9) TMI 1153 - HC - Customs

Import against Advance License - fulfilment of export obligation - physical diversion of raw material - benefit under the DEEC scheme under various customs notifications - Tribunal decided the issue against the Revenue - Whether any substantial question of law arises for consideration in this appeal? Held that - The revenue cannot raise the contentions questioning the order passed by the CESTAT dated 16.01.2002, which has attained finality. Since the revenue did not challenge the said order by filing an appeal before this High Court, the contentions raised by the learned counsel Mr.Pramod Kumar Chopda that the order is only an order of remand and therefore the department participated in the de-novo adjudication cannot be sustained and we are not inclined to accept the other said submission on account of candid and pointed observations made by the tribunal as to the manner in which the adjudication order was required to be done de-novo. Thus, the order passed by the tribunal dated 16.01.2002 was not an order of remand simplicitor but order with pointed observations and directions explicitly with regard to the stock of raw materials and finished goods in the factory premises. The entire issue revolves around facts, which has been considered by the adjudicating authority and the tribunal concurrently against the revenue and in favour of the assessee, and as such, there is no question of law arising for consideration in this appeal much less a substantial question of law. Appeal of Revenue dismissed.

Issues:
1. Interpretation of evidence regarding diversion of raw material for export obligation fulfillment.
2. Supremacy of substantive legislation over Act and Notification.
3. Compliance with conditions of exemption notification by importer.
4. Mandatory nature of Clause VI of Notification No. 203/92-Cus.
5. Impact of discharge certificate on importer's liability.
6. Strict construction of exemption notifications and eligibility criteria satisfaction.

Analysis:

Issue 1 - Interpretation of Evidence:
The appeal involved the question of whether raw materials were diverted for purposes other than export obligation fulfillment. The tribunal considered the stock verification, deposition of individuals, and sale of imported goods locally. The court held that contentions challenging the tribunal's 2002 order, which had attained finality, could not be raised by the revenue. The Commissioner's detailed de-novo adjudication order analyzed the stock position, leading to the conclusion that the show cause notice's proposal was not sustainable. The tribunal affirmed this decision, emphasizing that the issue was factual and had been thoroughly considered by the authorities.

Issue 2 - Supremacy of Legislation:
The appeal raised concerns about whether substantive legislation could override Act provisions and notifications. The court did not find any substantial legal question, emphasizing that the matter primarily revolved around factual considerations. The tribunal's detailed assessment and confirmation of the Commissioner's order indicated a comprehensive analysis of the stock position and compliance with legal requirements.

Issue 3 - Compliance with Exemption Conditions:
The case questioned whether an importer must comply with conditions stipulated in an exemption notification to avail benefits. The court highlighted that the tribunal's decision, based on factual assessments and legal considerations, favored the assessee. The Commissioner's order, upheld by the tribunal, demonstrated a thorough examination of the matter, leading to the dismissal of the revenue's appeal.

Issue 4 - Mandatory Clause VI of Notification:
The appeal addressed the mandatory nature of Clause VI of Notification No. 203/92-Cus concerning the disposal and utilization of exempt materials. The court reiterated that the tribunal's decision, supported by the Commissioner's detailed analysis, did not give rise to any substantial legal question. The factual evaluation by the authorities led to the rejection of the revenue's appeal.

Issue 5 - Impact of Discharge Certificate:
The case debated whether a discharge certificate absolved the importer of compliance liability with exemption notification conditions. The court emphasized that the tribunal's reasoned decision, upholding the Commissioner's order, did not present any significant legal issue. The factual considerations and legal interpretations supported the assessee's position.

Issue 6 - Strict Construction of Exemption Notifications:
The appeal examined the strict construction of exemption notifications and eligibility criteria satisfaction. The court concluded that no substantial legal question arose from the tribunal's decision, which extensively reviewed the factual aspects and legal implications of the case. The dismissal of the revenue's appeal underscored the factual nature of the dispute and the adequacy of the authorities' assessments.

In summary, the court dismissed the revenue's appeal, emphasizing the factual nature of the issues and the comprehensive analyses conducted by the authorities, which did not give rise to substantial legal questions warranting further consideration.

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