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TMI Blog2017 (4) TMI 988X X X X Extracts X X X X X X X X Extracts X X X X ..... ble for exemption from additional duty of customs also - appeal allowed - decided in favor of assessee. - E/141 to 143/06 - A/86298-86300/17/EB - Dated:- 8-3-2017 - Shri Ramesh Nair, Member (Judicial) And Shri Raju, Member (Technical) Shri A.B. Nawal, Cost Accountant for Appellant Shri S.V. Nair, Assistant Commissioner (A.R) for respondent Per : Ramesh Nair The fact of the case is that the appellants are a 100% Export Oriented Unit manufacturing Manifold Intake Variable Geometric Induction Systems (VGIS), falling under Chapter Sub-Heading No.8409.00 of the First Schedule to the Central Excise Tariff Act 1985 and Chapter Sub-heading No.8409.91 of the First Schedule to the Customs Tariff Act, 1975. During audit of the records of the appellants by the department in September 2001, it was observed that from February, 2000 to October, 2000. They had cleared 16793 pieces of the above excisable goods for home consumption without payment of appropriate duty. Enquiry revealed that the clearances were purportedly effected against an ARO No.6/2000 dt. 29.12.99 issued by the Office of Director General of Foreign Trade, New Delhi to M/s. Daewoo Motors Pvt. Ltd., New Delh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emand by denying the exemption notification No.82/92-CE. He further submits that as regard procedure regarding supply of goods against the ARO he referred to the events given in the appeal memo. According to which, appellants have followed the procedure for removal of goods under exemption against ARO such as, submission of ARO to the Jurisdictional Central Excise Authorities, the removal of goods under AR3A, intimation to the jurisdictional departmental officer, submission of the documents such as invoices along with AR3A duly countersigned by the recipient of excise authorities etc. With compliance of the said prescribed procedure, it cannot be said that the appellant have not followed the procedure therefore on this count also the Commissioner should not have denied the exemption. He further submits that since the appellants have followed the prescribed procedure the entire fact was in the knowledge of the department, therefore the show cause notice issued invoking the extended period beyond the normal period of one year is time bar. He place reliance on the following judgments: (i) Cadila Laboratories Pvt. Ltd. Vs. Commr. Of Central Excise, Vadodara 2003 (152) E.L.T. 262 (S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers are read hereunder: Duty Exemption Scheme 7.1 The Duty Exemption Scheme consists of Duty Free Licence and Duty Entitlement Pass Book (DEPB). Duty Free Licence 7.2. 'Duty Free Licence' includes Advance Licence, Advance Intermediate Licence and Special Imprest Licence. Import of raw materials, intermediates, components, consumables, parts, accessories, mandatory spares (not exceeding 10% of the CIF value of the licence), and packing material (hereinafter referred to as 'Inputs') may be permitted against a Duty Free Licence. Advance Licence 7.3. An Advance Licence is granted to a merchant exporter for the import of inputs required for the manufacture of goods without payment of basic customs duty. However, such inputs shall be subject to the payment of additional customs duty equal to the excise duty at the time of import. The said additional customs duty shall be adjusted in the following manner: (a) If the importer uses the inputs for production of export goods, which are otherwise liable to a duty of excise and eligible for Modvat, he may avail of Modvat Credit in respect of the additional customs duty so paid, immediat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icences are of two types and imports under advance licences covered by Para 7.3 are exempt only from basic customs duty while import under licences issued in terms of Para 7.4 would be exempt from additional customs duty and anti-dumping duty as well and the conditions of both the licences are different. Notification No.30/97-Cus relates to licences issued under Para 7.4 and these imports are exempt from additional duty of Customs too. Advance Release Orders issued under Para 7.15 may be in respect of advance licences Issued in terms of Para 7.3 or 7.4. The advance licences held by Lupin Laboratories Pvt. Ltd. admittedly was issued under Para 7.4. As a result, the materials imported under that advance licence was eligible for exemption from additional duty of customs also. Procurement from domestic market under Advance Release Orders may be from EOU/canalising agencies/domestic manufacturer/EPZ etc. But terms of receipt of the materials from domestic suppliers have to be the same as terms of import (exempt from payment of both basic and additional customs duty) as domestic procurement is a substitute for import. 4. Notification No.82/92 which relates to supplies by EOU etc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... would disrupt the supplies under advance licence scheme, would create difficulties for advance licence holders and domestic producers by creating a bias in favour of imports. Such an interpretation of notification so as to close the door for domestic supplies and to promote imports is to be avoided. No such bias in favour of imports is to be observed in the Export-Import Policy. 6 . In the view we have taken above, the appeal succeeds and is allowed with consequential relief, if any, to the appellant(s) . From the above decision of the Tribunal the very same issue has been decided in favour of assessee. According to which under the Notification No.82/92-CE the duty of CVD and SAD are also exempted. The aforesaid decision has been upheld by the Supreme Court. As regard the allegations of the Ld. Commissioner that the appellant have not followed the prescribed procedure for removal of goods under ARO we observe that the appellant have substantially complied with the procedure. The event given in the appeal memo is reproduced below: Date Event 01.02.2000 Sealed Envelope received from Central Excis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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