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TMI Blog2014 (4) TMI 55X X X X Extracts X X X X X X X X Extracts X X X X ..... cation No.1/95-CE dt. 04/01/1995. Entire production of shrimp feed/prawn/shrimp made using the duty free materials and capital goods were required to be exported. 3. As required by LOP, undertaking was given by the appellant executing an agreement on 15/12/1993 to fulfill conditions thereof and started commercial production on 01/11/1994. On 25/11/1997 there was an amendment to the LOP allowing the appellant to manufacture shrimp feed with the annual capacity of 10,000MTs and shrimps and prawn (processed only) 1200MTs annually. Besides that, approval was subject to condition that the appellant shall maintain 57% NFE as against 61% stipulated in the earlier LOP dated 28/06/1993 (Ref: Page 61 of appeal folder). 4. Second amendment to the LOP was made on 24/02/1998 (Ref: Page 72 of the appeal folder) and a revised agreement was executed by the appellant on 26/03/1998 giving undertaking to export shrimp feed, shrimp and prawns (processed) so as to achieve minimum export turnover of USD 632.00 millions in five years as under: 1st year (1998 - 19 99) USD 32,00,000 2nd year (1999 - 2000) USD 120,00,000 3rd year (2000 - 2001) USD 160,00,000 4th year (2001 - 2002) USD 160,00,000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tral Excise Act, 1944, reduced by the amounts paid by the appellant on de-bonding. (vi) Penalty of Rs.10 lakhs was imposed on the unit for the various contraventions of the conditions of the respective Notifications and law. 6. Appellant failed to succeed before the learned adjudicating authority raising various pleas as recorded by learned adjudicating authority in Para 4 to 6 of the adjudication order. That authority hearing the appellant on different dates recorded that it failed to satisfy the conditions of Notification No.53/97-Cus. and Notification No.1/95-CE and also violated provision of Chapter No.IX of EXIM Policy 1997-2002 as well as failed to comply with the condition No.2(i), (ii) and (vi) of the LOP and agreement dated 26/03/1998. It was also recorded that the appellant failed to acquire foreign exchange as stipulated by the LOP and as amended from time to time and agreement executed in that behalf. 7. Learned Authority found that the appellant failed to submit quarterly report to the VEPZ authorities and also sold shrimp feed in DTA without permission of the Development Commissioner and no export was made in the years 1999-2000 to 2000-03. Plea of the appellant th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Book of Procedures. 12. Learned Adjudicating Authority also noticed that in Para 14(b) of the penalty order, Development Commissioner mentioned that the Board of Approvals for 100% EOUs & EPZs in its 2nd (2002 series) in its meeting dated 05/03/2002 held that the Ravulapalem unit of the appellant was not EOU for the period from 01/04/1998 to 19/07/2001. Hence, the FOB value of exports of Rs.5,208.73 lakhs made for the review period i.e. upto 31/03/2001 mentioned in the appellants letter dated 24/03/2002 could not be treated as EOU exports and thereby there was shortfall in fulfillment of minimum NFE while Export Performance/Export Obligation for the period from 01/11/1994 to 31/03/2001 was required to be 100%. 13. Violation of law made by the appellant became patent from penalty order passed by the Development Commissioner. Appellant cleared entire quantity of shrimp feed manufactured by it in DTA in violation of the LOP norm. So also when the appellant expressed difficulties as to no export for shrimp feed, it should not have imported or indigenously procured raw materials duty free under aforesaid notifications. Its continuous imports as well as indigenous procurement establi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitted that for the period from 01/04/2002 to 31/03/2003, there was export of shrimps and shrimp feed of the value of USD 90,46,146.58 and that satisfied the export obligation as well as foreign exchange earnings. It was also submitted that for the period 01/04/1999 to 31/03/2000, State Bank of India has certified that the appellant received USD 31,60,603.59 from sale of shrimp feed. Further, the SBI certificate at page 128 shows export of shrimp value of USD 3,952,901.07 for the period April 19998 to 30/10/1998 (Reference page 128 of appeal folder). Page 129 of the appeal folder exhibits that USD 39,52,901.07 was received by the appellant during the period 1998-99 and export documents were negotiated through SBI. It was accordingly submitted that foreign exchange earnings made by the appellant exhibited by page 128 to 135 of the appeal folder were as under: PERIOD Foreign exchange earned from deemed export Deemed export of supply of feed against dollar Export of shrimp Foreign exchange earnings not mentioning the goods exported Foreign exchange earning from shrimp feed Foreign exchange earning from export of shrimp 1998-20/10/1998 USD 3952901.07 1998-99 USD 3952 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 145 of the appeal folder), Department cannot reopen a case: Sudhan Spinning Mills (P) Ltd. Vs. CCE, Madurai [2008(227) ELT 142 (Tri.)] Mphasis Ltd. Vs. CC, Bangalore [2007(218) ELT 587 (Tri. Bang.)] CCE&C, Surat Vs. Amitex Silk Mills P. Ltd. [2007(216) ELT 589 (Tri. Ahmd.)] 24. It was also submitted that the appellant was entitled to the exemption benefit under Notification No. 196/94 dated 08/12/1994 in instead of Customs Notification No. 53/97 dated 03/06/1997. 25. On the aforesaid grounds it was prayed by the appellant that adjudication having been made contrary to the facts and evidence on record remand of the matter may be made to examine the permission of the Development Commissioner relating to DTA sales and foreign exchange earnings and pass appropriate order. ARGUMENT ON BEHALF OF REVENUE 26. Learned AR inviting attention to the Bills of Entry called for by Tribunal for examination submitted that those documents exhibits that imports were made by the appellant duty free under Customs exemption Notification No.53/97-Cus dated 03/06/1997. Similarly indigenous goods were procured duty free under Central Excise Notification No. 1/95-CE dated 04/01/1995. Present stand of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... achieve NFEP requirement. Accordingly, the FOB value of export for the relevant period cannot be considered towards fulfillment of NFE obligation. 30. The appellant having failed to fulfill the basic condition of the notification as to its eligibility, it is not entitled to any benefit under law. It was further argued that Notification No.53/97-Cus. was an incentive given to aquaculture farms and appellant not being so, made undue gain. Therefore undue benefit availed by the appellant is required to be restored back to the treasury with interest and penalty to protect interest of Revenue. 31. It was further argued by Revenue that merely filing the return and showing DTA clearance in page 61 & 62 of the appeal folder, it shall not get immunity from the levy without real permission letter produced before learned Adjudicating Authority. Section 28 of the Customs Act, 1962 was rightly invoked when Revenue was defrauded and adjudication was completed lawfully dismissing plea of bar of limitation made by the appellant. 32. It was further argued by the Revenue that the appellant having defrauded Revenue, making undue gain of the benefit of custom Notification No.53/97-Cus and excise N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RAW MATERIALS IMPORTED SPARES Period Assessable value of imports Basic Customs Duty Addl. Customs Duty Total duty payable by the Unit From To Rs. Rs. Rs. Rs. 01/08/1999 31/03/2000 28,88,046 9,18,563 6,72,908 15,91,471 01/04/2000 31/03/2001 75,67,872 21,01,075 19,97,107 40,98,182 01/04/2001 31/03/2002 43,32,679 11,80,562 11,37,933 23,18,495 Total 1,47,88,597 42,00,200 38,07,948 80,08,148 37. The foreign exchange earned by the appellant as appears at page 136 of the appeal folder is as under:- Period Direct exports made Feed supplies against USD Total exports made In USD Rs. In lacs In USD Rs. In lacs In USD Rs. In lacs 01/04/1994 to 31/03/1995 Nil Nil Nil Nil Nil Nil 01/04/1995 to 31/03/1996 Nil Nil Nil Nil Nil Nil 01/04/1996 to 31/03/19957 Nil Nil Nil Nil Nil Nil 01/04/1997 to 31/03/1998 Nil Nil Nil Nil Nil Nil 01/04/1998 to 31/03/1999 3,952,901.07 1,671.96 Nil Nil 3,952,901.07 1,671.96 01/04/1999 to 31/03/2000 Nil Nil 3,160,603.59 1,589.02 3,160,603.59 1,589.02 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as any misrepresentation. Apex Court held that once an advance licence was issued and not questioned by the licensing authority, the Customs authorities cannot refuse exemption on an allegation that there was misrepresentation. If there was any misrepresentation, it was for the licensing authority to take steps in that behalf. Present case of the appellant is that it had defrauded the Customs claiming exemption of Customs duty at the time of export and later on says that it is governed by a different notification which has not met scrutiny of Customs. 40. Appellant relied on the decision in the case of Centwin V. CC, Chennai - 22002 (149) ELT 573 (Tri - Chennai), where the fabrics imported by the appellants under two Bills of Entry were originally allowed clearance by the Customs Authorities after accepting the licence. It was not in dispute that the appellants used the same fabrics which was imported for export production and exported the goods. Correlation between imported goods and the exported goods was established. The imported fabrics were arranged by the buyers of the finished garments and the buyer has also accepted the exported garments as produced from the fabrics which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gave certain benefits to the economy like preservation of foreign exchange, import substitution, savings of transportation costs and to provide competitiveness and level-playing field for Indian exporters. According to the Revenue, the expression occurring in the second proviso to Section 3(1), namely, 'allowed to be sold in India' was applicable only to DTA sales against rupee and not DTA sale against foreign exchange. But Hon'ble Court held that DTA sale against foreign exchange was covered by the expression 'allowed to be sold in India' and, therefore, such sale fell under the proviso to Section 3(1) of the 1944 Act. In the circumstances, the duty liability of the assessee was required to be determined after allowing to it the benefit of Notification No. 2/95-CE. That notification granted partial exemption to the assessee from duties in respect of goods manufactured in 100% EOU and allowed to be sold in India under para 9.9 (a), (b), (c) and (d). Once DTA sales against foreign exchange are held to be covered by the proviso to Section 3(1) of the 1944 Act then the whole difference between DTA sales against rupee and DTA sales against foreign exchange, for the purposes of Notific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ltd. V. CCE, Maduriai - 2008 (227) ELT 142 (Tri) which was a stay order which has no precedential value. 44. Appellant further relied on the decision in the case of Mphasis Ltd. V. CC, Bangalore - 2007 (218) ELt 587 (Tri - Bang). Tribunal in that case was given to understand that the goods which were in the premises shared by the customer of the appellants had already been de-bonded on payment of appropriate duty. The Adjudicating authority had demanded duty foregone on the entire goods imported and procured locally. While the Show Cause Notice had invoked the Notification issued in 2003, it was seen that the Adjudicating authority had given a finding on violation of condition 15 of Notification No. 106/2001. The goods in question were imported in the year 1999 and without availing the benefit of Notification issued in 2003 for which there was a fundamental flaw in the Show Cause Notice. Even on merits, there was no justification for demand of duty as the appellants had de-bonded the said goods and paid the appropriate duty. Accordingly it was held by Tribunal that the impugned order had no merit for which appeal was allowed. In the present case, duty liability was discharged by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication quoted in the bills of entries and the reason why plea of application of different notification was taken before Tribunal for the first time. (G). Year wise import as per bills of entry, export of shrimp feed, shrimp and prawn (processed) be furnished to adjudicating authority for his examination with foreign exchange details. 47. Above list of examination is comprehensive but not exhaustive. Appellant shall be required to furnish such evidence as may be required by learned adjudicating authority to satisfy him that appellant was not enriched at the cost of Revenue availing duty exemption under respective notification and complete the re-adjudication by 31/10/2014. Burden of proof lies on the appellant. Under no circumstances adjournment shall be allowed to the appellant since the matter is already 10 (ten) years old and show cause notice was issued on 18.7.2003 demanding customs duty for the period from 01/08/1999 to 31/03/2002 and excise duty for the period from 01/04/1999 to 31/03/2002. Day to day hearing shall be carried out recording the proceeding beginning from the month of April 2014 for which appellant shall make application to the learned adjudicating authority ..... X X X X Extracts X X X X X X X X Extracts X X X X
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