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TMI Blog1999 (6) TMI 481X X X X Extracts X X X X X X X X Extracts X X X X ..... ous inputs and duty paid imported inputs and goods were cleared under bond. The appellants, under the direction of the Central Excise authorities, reversed credit availed of duty paid on the inputs used in the manufacture of exported goods, as the Department was of the view that availment of inputs stage credit under Rule 57-A was not permissible in terms of Notification 203/92-Cus dated 19.5.92. Subsequently, they filed claims for refund which were rejected on the ground that it was not permissible to export goods under VABAL Scheme and simultaneously avail Modvat credit on inputs used in the manufacture of exported goods and that, therefore, credit was rightly reversed and the credit amount was not required to be refunded. The Commissione ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s whether the conditions of this notification can be read in the Modvat Rules. This notification as has been elaborated before us earlier, is an exemption notification which has been issued under Section 25 of the Customs Act and it exempts from whole of duty of customs leviable in respect of the materials which are imported into India against the value based advance licence issued in terms of para 49 of the Export and Import Policy 1st April 1992 to 30th March, 1997 subject to the conditions stipulated therein. It is seen from the notification that it covers both the contingencies of importation of goods before exportation of the finished goods as well as after the exportation of the finished goods. The only condition which has been focuse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us is that there is a difficulty for the Departmental authorities to ascertain whether particular exportations which have been claimed or reckoned under the DEEC Scheme had the inputs used therefor for which the MODVAT Credit was taken. We observe that the learned lower appellate authority has mentioned the practical way to get over this difficulty. This is by way of endorsement of AR4 application or AR 4A form under which the goods were cleared from the factory. In any case the question that has been posed before us is whether this Condition (V) can be read into the MODVAT Rules and whether in term of Rule 57I read with Rule 57F (3) the reversal of the MODVAT Credit can be made in the circumstances of the case. We observe what has to be s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ow the respondents can be denied the benefit of MODVAT Credit taken. The respondents had taken earlier the MODVAT Credit and thereafter had reversed it as has been explained to us and it is not denied by the Revenue that this was at the instructions of the Departmental officers. They like a good assessee carried out the directions of the officers and reversed the MODVAT Credit. Thereafter they staked their claim for refund or restoration of the credit. It is this prayer for restoration which has been denied. We observe as it is Rule 57F (3) there is a specific provision that even when the export goods are cleared free of duty the benefit of MODVAT Credit would not be denied. There is nothing under this provision to say that whether the expo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rules. We observe that this declaration when it was wrongly made can only be read in the context of the requirements of the exemption Notification 203/92 and that wrong declaration would amount to the violations of the conditions of the notification. Once the conditions of the notification is violated action under the law in terms of Section 111 (o) of Customs Act, 1962 can be taken and also in respect of the exported goods under Section 113 of Customs Act, 1962 can be taken. The Hon'ble Supreme Court in the context of similar notification in the case of Sheshak Sea Foods Pvt. Ltd. Vs. Union of India and others reported in 1997 (68) ECR 17 (SC) = 1996 (17) RLT 617 (S.C.) has clearly held so in the context of the violations committed in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would not be sold, loaned, transferred or disposed of in any other manner, had been disposed of by the appellants. The Customs authorities therefore, clearly had the power to take action under the provisions of Section 111 (o). 10. We do not find in the provisions of the Import and Export Policy or the Hand Book of Procedures issued by the Ministry of Commerce, Government of India, anything that even remotely suggests that the aforesaid powers of the Customs authorities had been taken away or abridged or that an investigation into such alleged breach could be conducted only by the licensing authority. That the licensing authority is empowered to conduct such an investigation does not by itself preclude the Customs authorities from doing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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