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TMI Blog2023 (10) TMI 825X X X X Extracts X X X X X X X X Extracts X X X X ..... ( herein after referred as Respondent) against non imposition of redemption fine and penalty under Section 112(a) and 114A of the Customs Act, 1962 by the adjudicating authority in the impugned order. As the issue involved in all the four appeals emanate from the common Order-in-Original dated 11.04.2019, they are taken up together for disposal by a common order. 2. The Appellant is a 'Nominated Agency' in accordance with the Foreign Policy. As per the scheme introduced by Government of India - 'Export against supply by Nominated Agency', the Appellant imported gold/silver/platinum (The goods) without payment of customs duty and supplied the same to various exporters for manufacture of jewellery and subsequent export. The Exemption Notification No. 57/2000 dated 08.05.2000 gives effect to this export promotion scheme, subject to fulfillment of conditions mentioned therein. 3. In the present case goods were imported during November 2011 to October 2013 and supplied to Ganesh Jewellery House (I) Ltd. (SGJHIL), involving customs duty of Rs.13,53,67,882/-.Similarly goods imported during the period December 2008 to November 2012 were supplied to Enfield Gems and Jewell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng decisions: (i) Sandur Micro Circuits Ltd Vs CCE, Belgaum reported in 2008(229)ELT 641 (SC) (ii) CCE, Allahabad Vs Sangam Structural Ltd. 2015(39)STR 1034 (Tri- Del) 8. The Appellant stated that an identical issue for the period 2008 has been decided in their favour by the CESTAT, Bangalore in their own case reported in 2009 (233) ELT 260 wherein it has been categorically held that the provisions of the Exemption Notification 57/2000 read with erstwhile Circular No. 24/98- Cus dated 24.04.1998 nowhere states that non-realization of sales proceeds by Exporters will result in demand of Customs duty foregone from the Nominated Agency. Accordingly, they contended that no duty can be demanded from them. 9. The Ld. A.R stated that Circular 28/2009 clearly states that the nominated Agency should produce the BRC from the exporters within the prescribed period , for availing the benefit of the exemption notification 57/2000. If the Nominated Agency fails to submit the BRC as prescribed in the Circular 28/2009, then the customs duties foregone on the goods supplied can be demanded from the Nominated Agency. Accordingly, he supported the impugned order. 10. Heard both sides and perus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -1 and produces such documents as stipulated in the Export and Import Policy and the Handbook of Procedures, Volume-1 and produces such proof of exports made through exhibitions/export promotion tours etc., as may be required by the Assistant Commissioner of Customs or the Deputy Commissioner of Customs to satisfy himself with regard to eligibility of the importer for the duty free import of replenishment material." 17. A close reading of the above proviso shows that the nominated agency who is the importer, executes a bond undertaking to export the jewellery containing gold equal to the imported gold. In case, the jewellery is not exported within the stipulated period, the importer is under an obligation to pay the Customs duties foregone on the imported gold. This notification does not impose any condition on the importer to ensure realization of the foreign exchange for the jewellery exported. The fact that the gold imported free of duty was given to the second appellant is also not disputed by the Revenue. The second appellant Rajesh Exporters Ltd. had also exported the goods. There is ample evidence to show that the jewellery containing gold equal to the quantity imported h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs relating to foreign exchange are governed by Foreign Exchange Management Act (FEMA). The Customs Authorities are not enforcing the provisions relating to non-realization of foreign exchange. If at all there is violation of FEMA and the related regulations, the liability would be on the exporter, suitable action lies with the enforcement authorities and Reserve Bank of India. With regard to the violations of exim policy, adjudication can be done only by authorities notified under Section 13 of Foreign Trade (Development & Regulation Act) 1992. The first appellant imported the goods and warehoused the same. Duty can be demanded from the first appellant only in respect of the situations enumerated in Section 72 of the Customs Act. Revenue has not shown that there exist any of the situations contemplated in Section 72 of the Customs Act. Hence, no duty can be demanded from the first appellant under Section 72 of the Customs Act. As far as the second appellant is concerned, they are not the importers of gold. They purchased on loan basis gold from the first appellant. They had also fulfilled the export obligations. In other words, the goods have been physically exported in the light ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Notifications are issued in exercise of powers conferred by sub-section (1) of Section 5A of the Central Excises and Salt Act, 1944 (in short the 'Act'). 5. The issue relating to effectiveness of a Circular contrary to a Notification statutorily issued has been examined by this Court in several cases. A Circular cannot take away the effect of Notifications statutorily issued. In fact in certain cases it has been held that the Circular cannot whittle down the Exemption Notification and restrict the scope of the Exemption Notification or hit it down. In other words it was held that by issuing a circular a new condition thereby restricting the scope of the exemption or restricting or whittling it down cannot be imposed. The principle is applicable to the instant cases also, though the controversy is of different nature. 6. The appeals fail and are dismissed." 14. In the case of CCE Allahabad Vs Sangam structurals Ltd. 2015(39)STR 1034 (Tri- Del), it has been held as under: "4. We also note in passing that the conditions prescribed by the CBEC circular dated 27-7-2005 seem to go beyond the requirement of the exemption notification. It is settled law that CBEC circulars can ..... X X X X Extracts X X X X X X X X Extracts X X X X
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