9911796707
TMI Blog2007 (2) TMI 436X X X X Extracts X X X X X X X X Extracts X X X X ..... ey sold their licences in the market, which were ultimately purchased by one M/s. Kunal Engineering Co. Ltd., Chennai (M/s. Kunal, for short). M/s. Kunal used the licences for duty-free import for raw material under Notification No. 204/92-Cus., dated 19-5-92. Subsequent investigations held by the department revealed that the respondents had availed Modvat credit under Rule 57A of the Central Excise Rules, 1944 on inputs used in the manufacture of the products exported under the QBALs, thereby disentitling themselves from transferring the licences. In other words, condition No. (vi) of the above Notification was found to have been violated by the respondents. The investigative results further revealed that the respondents had reversed the M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 19-5-92 and submitted that the respondents had suppressed before the licensing authority the fact that they had availed input-stage credit in respect of the goods, which they had exported under the QBALs. The transferability endorsements of the said authority were obtained fraudulently and therefore the respondents transferee (M/s. Kunal) was not entitled to the benefit of Notification 204/92-Cus. Condition No. (vi) of the Notification, which had laid down that, where exported goods were manufactured availing credit of Central Excise Duty or Additional Duty of Customs in respect of any inputs under Rule 56A or 57A of Central Excise Rules, 1944, the facility of transfer of materials or the licence would not be available, was violated an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ge of such obligation, the facility under Rule 191A or 191B of the Central Excise Rules, 1944 had not been availed in respect of the imported materials and no refund or rebate had been obtained or claimed under Section 74 of the Customs Act or under the Customs and Central Excise Duty Drawback Rules, 1971. However, there was no embargo on availment of Modvat credit on inputs used in the manufacture of the final product exported under the licence. In other words, for claiming the benefit of exemption under the Notification in respect of the imported raw material, it was not a condition for the importer not to have taken Modvat credit on the inputs used in the final products already exported by him (The position was different in respect of an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authority. 5. The proposal to impose penalty on the respondents under Section 112 is questionable from another angle also. Such penalty depends on liability of imported goods for confiscation under Section 111 of the Act. In the present case, the show-cause notice held the materials imported by M/s. Kunal, to be liable for confiscation under Section 111(o) of the Act, apart from seeking to recover duty on such goods. But the proposal to demand duty from M/s. Kunal in respect of such goods under Section 28 read with Section 111 (o) of the Act was dropped by the Commissioner and his decision has been accepted by the Board. Where the action proposed under Section 111 of the Customs Act stands dropped, there is no question of invoking Sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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