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TMI Blog2018 (6) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... ue of imports made under a particular consignment before allowing the benefit of exemption notification - In this back and forth movement of documents between the Customs and Central Excise authorities with constant updation of the nature and quantity of goods imported and of the exemption notification availed, there cannot be any allegation that appellants have mis-stated or suppressed the fact of availment of Notification 32/97-Cus. and in particular the fact of the raw materials having been invoiced to appellants at some cost. All the requirements and conditionalities of the notification have been complied with or satisfied by the appellant. There is no dispute that appellant has not satisfied or complied with the requirements of Notification No.32/1997-Cus. After this dispute, the appellants have switched over to advance authorization scheme and carrying out the very same activities of job work and export of the resultant goods, without running with the Customs. It is only the words free of cost in the Notification that have caused them the niggles which led to this appeal. Notifications like 32/97-Cus. and schemes like advance authorization etc. and nothing but incenti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed goods and imposition of penalties under various provisions of law. In adjudication, vide impugned order dated 15.7.2011, Commissioner took note of the Memorandum of Understanding between the appellant and the foreign supplier as per which appellant has to pay for raw materials imported by them and concluded that in the import invoice, the words are clearly shown as FOB China that nowhere in the invoice, is there any mention that the goods are being sent for job work and that there has been deliberate willful mis-declaration on the part of appellant to evade duty by wrongful claim on limitation. Based on these conclusions, the adjudicating authority denied the benefit of notification, confirmed duty along with interest as proposed in the show cause notice and imposed equal penalty on the appellant under section 114A of the Customs Act, 1962. Aggrieved, the appellants are now before the Tribunal. 2. Today, when the matter came up for hearing, on behalf of the appellant, ld. counsel Shri G. Shivadas made oral and written submissions, which are summarized as under;- 2.1 The purpose of the condition in the notification that the raw materials are supplied free of cost by for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xports of the job worked products. 2.7 Considering that the appellant had themselves informed the department about the nature of the work, especially the fact that they would be effecting payment for the raw material to the foreign supplier, proceedings initiated against them by show cause notice dated 6.11.2010 will be hit by limitation. 2.8 No suppression or mis-statement of facts can be alleged against the appellant. The dispute in question relates only to matter of interpretation of the various conditions laid down in the Notification 32/97-Cus. The appellants have also kept the department informed right from the beginning about their nature of import etc. In the circumstances, not only can the extended period of limitation cannot be invoked and there cannot be any penalty imposable on them under section114A of the Customs Act. 3. On the other hand, ld. AR Shri A. Cletus supported the findings in the impugned order. 3.1 He submitted that for availing the benefit of Notification 32/97, goods must be imported for jobbing. Explanation to the Notification gives the meaning of goods . In or to fit into the meaning of goods as used in the notification, the raw materi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty of the appellant to the duty exemption extended under Notification No.32/1997-Cus. dated 1.4.1997. To understand the matter in broader perspective, it would be useful to reproduce the said notification as amended from time to time:- In exercise of the powers conferred by sub-section (1) of section 25 of the Customs Act, 1962 (52 of 1962) and in supersession of the notification of the Government of India in the Ministry of Finance (Department of Revenue) No. 81/95-Customs, dated the 31st March, 1995, the Central Government, being satisfied that it is necessary in the public interest so to do, hereby exempts the goods imported into India from the whole of the duty of Customs leviable thereon which is specified in the first Schedule to the Customs Tariff Act, 1975 (51 of 1975) and from whole of the additional duty leviable thereon under section 3 of the said Customs Tariff Act, subject to the following conditions, namely :- (i) that the goods are imported for execution of an export order placed on the importer by the supplier of goods for jobbing; (ii) that the goods so imported, including resultant products, are re-exported to the supplier of the goods or to any oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s and exports are undertaken through sea ports at Bombay, Calcutta, Cochin, Kandla, Mangalore, Marmagoa, Madras, Nhava Sheva, Paradeep, Tuticorin and Visakhapatnam or through any of the airports at Ahmedabad, Bangalore, Bombay, Calcutta, Coimbatore, Delhi, Hyderabad, Jaipur, Madras, Srinagar, Trivandrum and Varanasi or through any of the Inland Container Depots at Bangalore, Coimbatore, Delhi, Gauhati, Hyderabad, Kanpur, Ludhiana, Moradabad, Pimpri (Pune) and Pitampur (Indore): Provided that the Commissioner of Customs may by special order and subject to such conditions as may be specified by him, permit import and export through any other sea port, airport, or Inland Container Depot or through a land customs station. Explanations. - In this notification, - (i) Export and Import Policy means the Export and Import Policy 1 April 1997 - 31 March 2002, published vide notification of the Government of India in the Ministry of Commerce No. 1/1997-2002, dated the 31st March 1997. (ii) Goods means raw materials, components, intermediates, consumables, parts, packing materials including hangers for garments, patterns, drawings, jigs, tools, fixtures, moulds, tackles ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ure of Excisable Goods), Rules 1996, seen at page 60 onwards of Vol. I, the schedule annexed to the bond clearly indicates that the import item is unprocessed human hair raw . The FOB value of the imported goods in dollars and rupees is indicated. The date of import is also worked out and indicated and the claim of full duty exemption under Notification 32/97-Cus. dated 1.4.1997 has also been indicated. From perusal of the Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods), Rules 1996, it emerges that while such application is required to be made under Rule 4 of the Rules ibid to the Assistant / Deputy Commissioner of Central Excise and countersigned by the latter, the said document is then required to produce before the Assistant / Deputy Commissioner of Customs to allow benefit of exemption notification claimed by importer and also debit the quantity and value of imports made under a particular consignment before allowing the benefit of exemption notification. The Assistant / Deputy Commissioner of Customs is also required to forward a copy of the Bill of Entry containing the particulars of import, the amount of duty paid and other relev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mporter-manufacturer in India to import goods for jobbing / job work as per the requirements of foreign parties. (b) Secondly, there has to be a value adoption of at least 10% when the resultant products are exported (c) Thirdly, there should not be any foreign exchange outflow towards cost of raw materials. 5.10 In our considered opinion, after doing all the arithmetic, if there still emerges a minimum of 10% value addition between the raw materials imported and that of the resultant job work products exported, that should be sufficient compliance of Notification 32/1997. 5.11 Discernibly, there has to be a cost of raw materials to be taken into account, because otherwise, there would be no way of working out the value addition. Hence, even if the cost of raw materials is notional or value can be for customs purposes, when goods are supplied free of cost or otherwise, there is a actual value involved to be suffered by the importer as long as there is a net value addition of more than 10% of CIF value and all goods are otherwise imported compliance of with conditionalities of the notification, it would be unjust to deny the benefits of the notification of importer. Poss ..... X X X X Extracts X X X X X X X X Extracts X X X X
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