9911796707
TMI Blog2006 (7) TMI 553X X X X Extracts X X X X X X X X Extracts X X X X ..... Show Cause Notice No. 18/2005-06 both dated 19th August, 2005, (both in F. Nos. DGCEI/V/95/2003-04-BZU) issued by the Directorate General of Central Excise Intelligence, Bangalore Zone, Bangalore-560 086. Shri C. Venkateswara Rao, Director of the said Company has also filed two separate applications as co-applicant in both the cases. 2. The facts of the case briefly stated, are that the appellant are manufacturers and exporters of Printed Circuit Boards (PCBs) and they had obtained two Advance licenses, namely, 0710015516/2/03/00, dated 12-8-2002 and 0710015517/2/03/00, dated 12-8-2002 for import of various raw materials free of duty under Notification No. 43/2002, dated 19-4-2002 for manufacturing PCBs. On intelligence obtained regardin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igation period and accordingly they had to endorse against a third advance license No. 0710025219 and their attempt to get the approval of the DGFT for endorsement of such exports with the two disputed licenses from the third license did not yield any result so far and accordingly they are not pursuing the defence point from their application. In certain cases of their export they have not realised the sale proceeds and consequently they have admitted the duty liability. The appellant also admitted the allegation that certain portion of the exempted duty free import namely Copper Clad Laminate Sheets have been sold on payment of duty and accepted corresponding duty liability thereof. The appellant also submitted their mistake in showing exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat they are entitled to Cenvat credit of the additional duty of custom duty paid on the imported raw materials, which were used for manufacture of PCBs cleared on payment of duty for domestic market. Learned Advocate also submitted that the submissions made for the main applicant will also apply to the application of Co-applicant. 5. Revenue representative objected to the benefit of Notification No. 25/99-Cus. to be given to the applicant as they had not fulfilled the procedural condition specified therein. Revenue also submitted that they must pay interest as per Kolkata High Court judgment as a part of contractual obligation. To this the learned Advocate submitted that the contractual obligation to pay interest arising out of the Bon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e applicant using both DEEC inputs as well as inputs procured from other sources to be taken into consideration for working out the export obligation fulfilment and re-determination of duty liability. (b) Benefit of Notification No. 25/99, with reference to the specified inputs put to use for manufacture of end-use products as envisaged in the said Notification No. 25/99. The appellant thus cannot be denied the benefit of this Notification since fulfilled the substantive requirements of this Notification as discussed earlier. (c) Merit rate of duty is applicable in respect of DEEC inputs cleared and sold as such in the domestic market. Revenue by their letter, dated 13-7-2006, accordingly, reworked duty liability as Rs. 45,00, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Accordingly, the Bench finds that tainted inputs are not eligible for Cenvat credit in terms of exclusion category of Rule 9 of Cenvat Credit Rules, 2004, having been required to pay duty as a result of detection of short-levy/non-levy due to suppression of material facts. The Bench finds no justification to allow CVD component on such inputs. Bench finds that in the case of German Remedies Ltd. v. Commissioner of Central Excise, Goa reported in 2004 (177) E.L.T. 539 (Tri. - Del.), CESTAT also acknowledged this test in para 3 of the said order which reads - the only ineligibility made is in respect of payment of additional amount of duty resulting from fraud/collusion etc. 8. Liability for payment of interest as per the Bond/underta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. Accordingly, two applications are finally settled in terms of sub-section (7) of Section 127C of the Customs Act, 1962 on the following terms and conditions : (i) The duty liability is fixed at Rs. 45,00,828/- in respect of License No. 0710015516/2/03/00 and Rs. 55,83,871/- in respect of License No. 0710015517/2/03/00. The applicant paid Rs. 49,55,311/-. The applicant shall pay the balance duty amount of Rs. 51,29,298/- within 30 days, not later than 6th September, 2006. (ii) Cenvat credit is eligible but limited to an amount of Rs. 22,06,735/- in respect of License No. 0710015516/2/03/00 and Rs. 24,72,870/- in respect of License No. 0710015517/2/03/00. (iii) The applicants shall pay interest at 10% per annum from the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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