9911796707
TMI Blog2007 (3) TMI 608X X X X Extracts X X X X X X X X Extracts X X X X ..... oyees of both the companies. UCL applied and got various advance licenses under advance license scheme for import of duty free coal and use the said coal for manufacture of clinkers/cement for export as per the obligation given by them while procuring the advance licenses. The import of the coal was done as per the Standard Inputs and Output Norms (SION) and were cleared from the port under notification No. 43/02-Cus., dated 19-4-2002, as amended from time to time. Appellant UCL utilized the duty free imported coal for the manufacture of final products and exported the same. In addition to the consumption in their own factory, appellant UCL dispatched such duty free imported coal to their subsidiary NCCL for manufacture of clinker/cement based on an agreement. As per the terms and conditions of the agreement NCCL was to utilize the duty free imported coal for the manufacture of clinkers/cement and supply the same to UCL for further export only. As per the terms and conditions the imported coal was transferred and debit notes were raised on cost basis without addition of custom duty or profit for accounting purposes and the clinker/cement was transferred to UCL for further export. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y free imports were made, most of them were redeemed and few have been submitted for redemption to the authorities. It is his submission that if there were no exports done by the appellant then the DGFT authorities would not have redeemed the licenses and would have taken penal actions and informed the customs authorities. It was also submitted that it is an admitted fact that the duty free coal imported has been utilized in the manufacture of clinker/cement as there is no allegation in the show cause notice that the said coal has been diverted in to local market. He also submitted that the adjudicating authority has not given the details of the compilation made by the authorities as regards to the figures of export, as mentioned in the order. He submits that the adjudicating authority has not considered the exports made by mentioning the file No. on the export documents. It is his submission that if the reconciliation is done then there would be no demand of the duty as the export obligations have been met by UCL. He submits that the decision of the tribunal in the case of Tetra Pak India Ltd. [2005 (190) E.L.T. 257] will squarely cover the issue on the interpretation of the claus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t notes for the cost of the coal without inclusion of the customs duty and other duties. It is also seen from records that NCCL had returned back clinker/cement back to UCL after adjustment of the debit notes for the cost of coal. Revenue has taken a view that such transfer and raising debit notes would amount to sale and violation of notification. The question, which arises for our consideration, is that whether the transfer of imported coal duty free by UCL to NCCL could be considered as violation of the condition No. (vii) of Notification No. 43/97-Cus. grants exemption from customs duties and other duties subject to the fulfilling of the conditions in the notification. We are concerned only with clause (vii) of the said notification, which we read : (vii) that the said licence and the materials shall not be transferred or sold; It can be noticed that above reproduced clause of notification No. 43/97-Cus. lays down a condition that duty free imported goods should not be sold or Transferred. The restriction of clause (vii) has to be viewed from the intention of this condition being incorporated in to notification. To our mind this condition was to discourage the importers f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceuticals case [1989 (44) E.L.T. 613 (S.C.)]. Therefore, giving of the material to ECOPLAST and its receipt back cannot be a violation. (i) The decision in Sehgal Knitwears case [2002 (143) E.L.T. 653 (Tri.-Del.)], relied by the Commissioner, has been suitably distinguished by the ld. Advocate on facts of exports having been made by independent manufacturer and the fact of the history of EXIM Policy Orient at Experts decisions was not before that bench of the Tribunal. We find substance in this submission to hold that Sehgal Knitwears decision cannot apply in the facts herein. The Customs Notifications have to be interpreted to advance the Policy Directions of EXIM Policy. The Commissioners finding in para 6 of the impugned order page 20 thereof that History of notification Policy are irrelevant when the language of the notification is Plain the existing notification has to be read misses the point of interpreting the reason for granting the manufacturing/processing. Out Sourcing condition relaxed as evident from the History. History is a good teacher and those who ignore the same do so at their own risk. We cannot ignore the lessons from the History in this case. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s are redeemed has to be looked in to by the adjudicating authority. Learned advocate submits that, if needed, they are ready and willing to demonstrate all the details of duty free imports made and corresponding exports, to the lower authorities, if the appeal is remanded for this limited purpose. Learned SDR has also no objection to this proposition. We find strong force in the contention of the advocate on this point. As we have already noted that on test check we found that the lower authorities did not consider the facts in correct perspective and were carried away by the interpretation of the clause (vii) of the notification No. 43/97-Cus. It is also not clear whether the appellant redeemed all the advance licenses after fulfilling the export obligations. This factual aspect has also to be gone in to by the lower authorities, as, if the appellant UCL has fulfilled all the export obligations then there would be no violation or infringement for demand of the duty and other consequential actions. We are of the view that, only for this limited issue the matter has to be remanded back to the original authority. 9. Accordingly, in the facts and circumstances of the case, holding ..... X X X X Extracts X X X X X X X X Extracts X X X X
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