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TMI Blog2015 (8) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... which was obtained by the assessee. - Decision in the case of Sheshank Sea Foods Pvt. Ltd. (1996 (11) TMI 67 - SUPREME COURT OF INDIA) followed. - Decided against the assessee. It necessary to observe that the Government should bestow its consideration and make appropriate provision dealing with such situations. After all, the Exemption Notification No. 30/1997 has been issued to implement and effect the EXIM Policy provisions. Therefore, the purport of the exemption notification is to advance the objectives of the EXIM Policy. When the DGFT has itself accepted the benefits of the assessee and carried out the amendment in the import licence and further that the assessee could make the exports on the basis of the amendment; albeit through third party, such person should not be left high and dry. Therefore, necessary amendments are needed in such notifications making appropriate provisions to meet these types of eventualities. We are hopeful that the competent authority shall look into these aspects and cater for such situations as well so that unnecessary hardship is not caused to the bona fide assessees as well. Insofar as charge of interest is concerned, we are conscious of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... material, the assessee disposed of the said manufactured gods in the domestic market. At the same time, in order to meet the export obligation under the said licences, it arranged the export through one M/s. Steel Company, Gujarat as its supporting manufacturer. M/s. Steel Company, Gujarat arranged the export performance through their agents M/s. Shirdi Industries Ltd., Mumbai. M/s. Shirdi Industries Limited in turn arranged for third party exports of cold rolled non-alloy steel coils through M/s. Essar Steel Ltd., Hazira, Surat, a merchant manufacturer. A quantity of 58.865 MTs and 176.5 MTs were exported vide Shipping Bill Nos. 1000051316 dated 17.05.2000 and 1000048872 dated 10.05.2000. These exports were made to Bangladesh via Mumbai Port. Further a quantity of 510.515 MTs was exported to Nepal by M/s. Steel Company, Gujarat vide Shipping Bill No. 68/DEEC/2000 dated 23.02.2000. On that basis, the assessee claimed that it had fulfilled its obligation. 3) The appellant/Revenue was not amused with the aforesaid manner of fulfilling the export obligation by the assessee. According to the appellant, conditions contained in Notification No. 30/1997 had not been complied with, by t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ept for utilisation in discharge of export obligation or for replenishment of such materials and the materials so replenished shall not be sold or transferred to any other person'. He argued that when admittedly this condition has not been fulfilled by the assessee, the assessee cannot be allowed the benefit of Notification No. 30/1997. In respect of this plea, he referred to the judgment of this Court in Sheshank Sea Foods Pvt. Ltd., Karnataka v. Union of India Ors. (1996) 11 SCC 755. 6) Mr. Gourab Banerji, learned senior counsel appearing for the assessee, refuted the aforesaid submission and supported the orders by arguing that the obligation to effect the export stood fulfilled by the assessee and since it was in terms of EXIM Policy, the assessee could not be fastened with any such liability. He also drew our attention to the proceedings which were taken out by the DGFT in this behalf. It was pointed out that DGFT had issued show-cause notice dated 20.10.2010 for initiating action for failure to complete the export obligation/failure to submit relevant information/documents. In this show-cause notice, the proceedings initiated by the appellant herein were also mention ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... advance licence with actual user condition in terms of para 7.4 of the EXIM Policy 1997-2000, from the whole of the duty of customs leviable thereon, including the additional duty leviable thereon under the Customs Tariff Act, subject to certain conditions mentioned in this Notification. In this behalf, we are concerned with condition Nos. (v) to (viii) as there is no dispute that other conditions have been satisfied. These conditions are reproduced below: (v) that the export obligation is discharged within the period specified in the said certificate or within such extended period as may be granted by the Licensing Authority by exporting resultants products manufactured in India which are specified in Part E of the said certificate (hereinafter referred to as resultant products) and in respect of which facility under rule 12(1))b) or rule 13(1)(b) of the Central Excise Rules, 1944 has not been availed in respect of materials permitted under the said license; (vi) that the importer produces evidence of discharge of export obligation to the satisfaction of the Assistant Commissioner of Customs within a period of 30 days of the expiry of period allowed for fulfillment of exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an amount equal to the duty leviable, but for the exemption, on the imported materials in respect of which the conditions specified in this Notification have not been complied with, together with interest @ 24% per annum from the date of clearance of the said materials. The export obligation was contained in the licence issued by the DGFT, which was to be adjusted during the period specified in the said certificate or within such extended period, as may be granted by the licensing authority (DGFT in this case). The assessee was supposed to produce evidence of discharge of export obligation to the satisfaction of the Assistant Commissioner of Customs within a period of 30 days of the expiry of the period allowed for fulfillment of the export obligation or within extended period as allowed. Stringent stipulation is contained in Condition (vii), which is very significant and relevant for our purposes. The respondent was not supposed to dispose of or utilize the exempt materials in any manner except for utilization in discharge of the export obligation. 12) It would mean that not only the raw material imported (in respect of which exemption from duty is sought) is to be utilised in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted 2712.41 MTs, it resulted in excess import of 589.26 MTs. Therefore, only on this excess import, customs duty was payable, which was directed to be paid along with interest calculated @ 15% from the date of first import to the date on which last consignment of exports were effected by the assessee through third party. The DGFT, in its order, also mentioned that there was no misutilization of the raw material imported by the assessee and there was no violation of any other conditions of the licence causing Revenue loss at the cost of exchequer. 16) The aforesaid Order-in-Original of DGFT was under the provisions of EXIM Policy. It is held by this Court in Sheshank Sea Foods Pvt. Ltd. (supra) that the same would not be binding on the customs authorities and as far as action taken under the Customs Act is concerned, the same is to be covered by the provisions of the Customs Act. The relevant discussion thereupon which takes note of the concerned provisions of the Act as well is reproduced below: 6. Learned counsel placed reliance upon a communication to all Collectors of Central Excise issued by the Central Board of Excise and Customs on 13-5-1969, on the subject of whether, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tself preclude the Customs authorities from doing so. 10. The communication of the Central Board of Excise and Customs dated 13-5-1969, refers to the breach of the condition of a licence and suggests that it may not be possible to take action under Section 111(o) in respect thereof. It is true that the terms of the said exemption notification were made part of the appellants' licences and, in that sense, a breach of the terms of the said exemption notification is also a breach of the terms of the licence, entitling the licensing authority to investigate. But the breach is not only of the terms of the licence; it is also a breach of the condition in the exemption notification upon which the appellants obtained exemption from payment of customs duty and, therefore, the terms of Section 111(o) enable the Customs authorities to investigate. 17) The decision in the aforesaid case, which is of the Coordinate Bench, binds us. 18) Judgment in the case of Titan Medical Systems (P) Ltd. (supra), which was referred to by Mr. Banerji, has no relevance at all. In that case, one of the conditions of duty exemption scheme contained in Notification No. 116/88-CUS was for conversion o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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