2018 (12) TMI 93 - AT - Customs

Advance licenses - Fulfillment of condition of N/N. 203/92-Cus - who is liable to fulfill the condition of notification, the original licensee or the transferee of the licensee? - Held that - The licence have been obtained by the exporters of garments are leather goods and unfulfilments of export allegation. The same had been transferred to the appellants on fulfilment of export obligations. The said transfer was duly authorised by the appropriate authority i.e. DGFT. In the absence of any allegation regarding forgery are falsification of the said licence or transfer of such licence, it is to be presumed that the appropriate authority i.e. DGFT had satisfied themselves about the fulfilment of condition of the N/N. 203/92-Cus. by the exporter. Any way onus to prove that input stage credit was not availed in respect of the goods exported is not certainly on the transferee the licence i.e. appellants - appeal allowed - decided in favor of appellant.

Issues:
1. Allegation of non-fulfillment of conditions under Notification No. 203/1992-Cus.
2. Burden of proof on the transferee regarding availing input stage credit.
3. Consideration of certificates issued by Central Excise Authorities.
4. Compliance with export obligations and transfer of licenses.
5. Applicability of previous judgments in similar cases.

Issue 1: Allegation of non-fulfillment of conditions under Notification No. 203/1992-Cus.
The case involved an appeal against Order-in-Original No. 06/2011-12/CAC/CC(EP)/AK/GR.VII dated 20.02.2012 passed by the Commissioner of Customs (EP), Mumbai. The appellants, M/s Indian Trading Corporation, had imported consignments availing exemption under Notification No. 203/1992-Cus. The Department alleged that the appellants did not fulfill the condition of the notification as they failed to submit proof that no input stage credit was obtained under Rule R57A of the Central Excise Rules, 1944. A show-cause notice was issued, and the Commissioner confirmed a demand against the appellants. The Tribunal remitted the matter back to the Commissioner, leading to the order dated 20.02.2012, which was the subject of the proceedings.

Issue 2: Burden of proof on the transferee regarding availing input stage credit.
The appellants argued that the burden of proving non-availment of CENVAT credit was on the transferor, not on them as the transferee. They submitted letters from Central Excise Authorities certifying non-availment of relevant credits. The Commissioner, however, focused on one certificate and did not consider others. The appellants cited relevant cases to support their stance, emphasizing that as importers, they were not concerned with exports. The Tribunal agreed that the onus was not on the appellants to prove non-availment of credits, especially since the licenses were transferred after fulfilling export obligations.

Issue 3: Consideration of certificates issued by Central Excise Authorities.
The Department contended that the certificates submitted by the appellants were either incomplete or pertained to a different period. However, the Tribunal found that the certificates were issued by Central Excise Authorities and held that the appropriate authority, DGFT, had verified the fulfillment of conditions by the exporter before transferring the licenses. The Tribunal emphasized that the onus was not on the transferee to prove non-availment of input credits, especially when there was no evidence of forgery or falsification.

Issue 4: Compliance with export obligations and transfer of licenses.
The Tribunal noted that the licenses obtained by the exporters of garments and leather goods were transferred to the appellants after fulfilling export obligations. The transfer was authorized by DGFT, indicating satisfaction with the conditions of Notification No. 203/92-Cus. The Tribunal presumed that the appropriate authority had verified compliance, and without allegations of forgery, the onus was not on the transferee to prove non-availment of credits.

Issue 5: Applicability of previous judgments in similar cases.
The Tribunal referenced previous cases where it was established that the transferee cannot be held responsible for fulfilling conditions under Notification No. 203/92-Cus. The judgments highlighted that the burden of proof regarding credit availment rested with the Revenue, and in the absence of evidence, demands based on show cause notices could not be sustained. The Tribunal, aligning with these precedents, allowed the appeal, emphasizing that the appellants were not required to prove non-availment of credits and that the impugned order was unsustainable.

This detailed analysis of the judgment covers the issues involved comprehensively, highlighting the key arguments, decisions, and legal principles applied in the case.

← Previous Next →