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TMI Blog2023 (12) TMI 324X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. - MR. RAMESH NAIR, MEMBER (JUDICIAL) AND MR. RAJU, MEMBER (TECHNICAL) Shri T. Vishwanathan, Shri Manish Jain, Ms. Shruti Khanna, Advocates for the Appellant Shri. Anoop Kumar Mudvel, Superintendent (Authorized Representative) for the Respondent ORDER This appeal has been filed by M/s. L T Ltd., against demand of Customs duty, interest and imposition of penalty. 2. Learned Counsel pointed out that they are engaged in providing Integrated Engineering Construction Solutions to offshore and onshore hydrocarbon projects. He pointed out that they had entered into a contract with M/s. Oil and Natural Gas Corporation Limited (ONGC) for construction of two well-head platforms and sub-sea pipeline at Bassein Oil Field. For the purpose of laying sub-sea pipeline, the appellant had imported Carbon Steel Seamless Pipes in terms of Notification No. 21/2015-Cus dated 01.04.2015. The said goods were dispatched from M/s. Jindal Saw Limited, Mundra, who carried out concrete coating process on the imported pipes. The said concrete coated pipes were thereafter sent to site of ONGC for completion of pipe laying by the appellant. After completion of the laying of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty of the processed goods leftover after completion of the export obligation. It is seen that in the case of PCL Oil Solvents Ltd (Supra) in identical circumstances following has been observed: 2 . Learned Counsel for the appellant pointed out that they are manufacturing goods availing benefit of imports duty free advance authorization. He pointed out that as per duty free advance authorization the appellant are allowed to import certain quantity of goods subject to value limits, for export of finished goods. The quantity of goods importable by them is determined by Standard Input Output Norms (SION). As a result, while they were permitted to import certain quantity against advance authorization duty free, they actually needed the lesser quantity to manufacture the goods required to be exported. Learned Counsel pointed out that Revenue is seeking to demand duty on account of their efficient manufacturing process. Learned Counsel pointed out that the Revenue has primarily relied on Para 4.28(f)(v) of Handbook of Procedure, 2004-09. The said paragraph reads as under:- 4.28(f) RA shall compare relevant portion of Appendix 23 duly verified and certified by Chartered Acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ded period of limitation cannot be invoked. He relied on the decision of Hon ble Gujarat High Court in Tax Appeal No. 271 of 2009. He argued that in such cases, even if there is any misdeclaration before DGFT, the Customs cannot invoke extended period of limitation on that ground as there is no misdeclaration before the Customs authorities. 4 . Learned Authorised Representative relies on the impugned order. He argued that the imports were made after exports and therefore, appellant was aware of the actual consumption of the raw material. He relied on the decision in the case KDL Biotech Limited v. CC (Export Promotion), Mumbai - 2015 (327) E.L.T. 305 (Tri. - Mumbai) to argue that in identical circumstances, the demand was upheld. 5 . We have gone through the rival submissions. We find that the entire case of Revenue is based on Para 4.28(f) of Handbook of Procedure, 2004-09. It is seen that Para 4.28(v) reads as under :- 4.28 Regularisation of Bona fide Default. Cases of bona fide default in fulfillment of EO may be regularised by RA as under : (i) to (iv) . (v) RA shall compare relevant portion of Appendix-23 duly verified and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the licensing authorities so that they could have issued the licence as per the actual requirement. Even after duty free importation, the appellants have neither made additional exports, nor paid the Customs Duty. These details were suppressed and came to light during investigation. Accordingly, we hold that there is a violation of the provisions of Handbook read with Foreign Trade Policy and since the exemption is granted to raw materials imported against Advance Authorisation issued in terms of Foreign Trade Policy, the exemption is subject to limitation as provided in the Notification, Foreign Trade Policy/Handbook of Procedures. We are not impressed with the argument of the Learned Counsel for the appellants that the said provision tries to restrict the provisions of the Foreign Trade Policy. In our view, it only clarifies the position relating to SION. It is not practically possible to precisely point out the exact input-output required which would be applicable for all manufacturers. Moreover such norms are based upon the feed back from the Trade Association which would normally be in the worst scenario. Foreign Trade Policy does not state that licence holder can use the su ..... X X X X Extracts X X X X X X X X Extracts X X X X
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