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TMI Blog1999 (4) TMI 196X X X X Extracts X X X X X X X X Extracts X X X X ..... als Ltd. who was a merchant exporter. It is noticed that the export products has been manufactured by their exporting manufacturer by availing benefit in terms of Rule 56A/57A of the Central Excise Rules. However, the said benefit of Modvat was reversed subsequent to the physical shipment of the goods. The A.C. who heard the matter on the basis of condition (vi) of the Notification 204/92 r/w 67 of the import policy held that the facility should not be available as the exported material had been made after availing Modvat credit. The A.C. by his order in original denied the appellants benefit of the exemption Notification. In the impugned orders Collector (Appeal) has held that once a transfer has been made by transferability has been accepted by the licensing authority after the availment of Modvat credit was reversed the Customs authorities cannot question it as the Modvat claim became nullity. Therefore, the Collector (Appeals) in respect of all appeals rejected the contentions of the department and allowed the appeal. 3. It is contended by the department that in terms of condition No. 6 of the Notification 204/92 once the exported goods were manufactured after availing of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is true that the transferability has been granted by the licensing authority. Once such transfer is made the importability of the goods cannot be questioned by the customs authorities. The point here for our consideration is the question of claiming exemption under Notification No. 204/92 issued by the Department of Revenue. The transferee importer claims exemption under these notification which cannot be given because condition No. 6 contained in paragraph 6 is a specific departure. The finding of the Collector (Appeals) is that reversal of Modvat credit makes a Modvat claim a nullity in our view is wrong in law. The condition No. 6 denies the benefit of the notification because the benefit is subjected to the said conditions. The para 6 of the Notification not only prohibits transferability of the licence but also the benefit of the notification. The transferability is contained in No. 8 that says that where the benefit is sought by the person other than the licensee the benefit shall be allowed. Licence bears the endorsement of transferability of the licensing authority. Once the transferability is given the import of it as stated by us earlier does not become prohibited. In oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... transferee is equally entitled to get the benefit duty-free import in respect of those items. 45. On proper scrutiny, we find that in fact by a reversal the breach of conditions of the exemption notification cannot be restored. Besides, there is a factual dispute as to the actual amount of benefit consumed by NALCO and there is a dispute raised by the Customs that there is more amount than what is stated by NALCO as to the Modvat benefit enjoyed by NALCO. Within the scope of the writ petition, it is not possible to investigate this aspect without production of proper evidence by both sides. It is however clear to this Court that the second stand to interpret the expression used in Modvat and VBAL Schemes to bail out NALCO regarding the conditions as per Exemption notification relied upon by the Customs authorities, is fallacious. To us, the second attempt is no doubt ingenious, but as per facts of the case, the same is without merit. Each and every word expressed in Modvat and VBAL scheme, has to be interpreted as per text and in the background of context. No pedantic grammatical understanding in isolation of the entire comprehensive meaning should be adhered." 6. No doubt t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entry in the credit account before removal of the exempted final product. If this debit entry is permissible to be made, credit entry for the duties paid on the inputs utilised in manufacture of the final exempted product will stand deleted in the accounts of the assessee. In such a situation, it cannot be said that the assessee has taken credit for the duty paid on the inputs utilised in the manufacture of the final exempted product under Rule 57A. In other words, the claim for exemption of duty on the disputed goods cannot be denied on the plea that the assessee has taken credit of the duty paid on the inputs used in manufacture of these goods." 7. We have considered the rival submissions made by Shri S. Kantawala. In our view, the judgment of the Orissa High Court squarely applicable of the facts of this case. The judgment of Supreme Court will not be applicable to the facts of this case because that was not a case of advance licence. That was more of a case of Modvat claim in respect of exempted goods and the said case was decided by the Supreme Court more on the basis of clarification given as mentioned in para 6 of the said judgment which was extracted above. In fact r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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