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TMI Blog2005 (8) TMI 258X X X X Extracts X X X X X X X X Extracts X X X X ..... p; 15-2-93 13.365 MT 03 8357/ 540 Bales 10,64,19/- -do- 9,04,566 11-3-93 27.000 MT 04 11519/ 540 Bales 10,27,73/- -do- 8,73,570 7-4-93 26.838 MT Under the DEEC Scheme, M/s. Rekha Overseas had to fulfil their export obligation by exporting 810 kgs. of Cassia Oil to be manufactured from the imported material. In due course of time, they filed 3 Shipping Bills covering a total quantity of 810 kgs. of what was declared as 'Cassia Oil'. The total F.O.B. value of the export goods, shown in these Shipping Bills, was Rs. 33,94,534/-. The export documents showed M/s. Rekha Overseas as having fulfilled their export obligation in terms of the advance licence under the DEEC Scheme. After these exports, the Directorate of Revenue Intelligence (DRI) instituted an investigation into the imports and exports made by M/s. Rekha Overseas and 2 other parties. Scrutiny of records showed that M/s. Rekha Overseas were working as a merchant-exporter and their supporting manufacturer was M/s. Natcon Fruit and Food Processors (Natcon, for short) as certified by the Spices Board (under the Ministry of C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mr. Sujit Mukund of M/s. Natcon. These proposals were contested by the noticees. M/s. Rekha Overseas requested the Commissioner for permission to cross-examine all those whose statements had been relied upon in the show-cause notice, but this request was turned down. Ld. Commissioner, after giving personal hearing to the parties, passed the impugned order confirming the demand of duty against M/s. Rekha Overseas and imposing on them a penalty of Rs. 1 lakh besides a redemption fine of Rs. 3 lakhs in lieu of confiscation of the imported/exported goods. The order also imposed a personal penalty of Rs. 1 lakh on Sh. B.S. Suman Aggarwal. Hence these appeals of M/s. Rekha Overseas and Sh. Suman Aggarwal. 2. Heard both sides. Ld. Counsel for the appellants reiterated the grounds of the appeals and stressed the point that the documentary evidence of M/s. Rekha Overseas having discharged their export obligation relating to the imported Cassia, in terms of the DEEC Scheme, had not been rebutted by the Department. The entire case of the Department was based on statements, some of which were retracted. The Commissioner had not accepted these retractions, nor had he allowed the appellants to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12th August, 1992 Import of Cloves, Cinnamon and Cassia under Duty Exemption Scheme. Attention is invited to the ALC Circular No. 4/92, dated the 23rd June, 1992 by which it was clarified that no advance licence shall be issued for the imports of Cloves, Cinnamon and Cassia under the Duty Exemption Scheme, since these items are importable only under special licensing scheme. On a review of the position, it has been decided to grant quantity based advance licences only for the import of cloves, Cinnamon and Cassia for the manufacture and export of Clove Bud Oil, Cinnamon, oleoresin, Cinnamon oil, Cassia oleoresin, Cassia Oil and Curry Powder (containing Cloves Buds), cinnamon and Cassia to the extent of 5% collectively and other 95% ingredients to be (of locally produced items) under the Duty Exemption Scheme as per the norms given in Annexure-I to this circular. 2. (a) Only quantity based advance licence is to be issued. (b) The facility of quantity based advance licence shall be available both to manufacturer-exporters and merchant exporters. While applying for a quantity based advance licence the applicant shall produce a certificate from the Spices Board conforming his own ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate is issued as per para 2 (b) of ALC Circular No. 9/92, dated 12th Aug., 1992 to obtain a quantity based advance licence for M/s. Rekha Overseas, Madras for the import of 81 MT of Cassia at a value of Rs. 40/- lakhs for the export production of Cassia oil. This certificate is issued subject to the condition that (a) M/s. Rekha Overseas, Madras and their supporting Manufacturer M/s. Nat-Con Fruit & Food Processors, Bangalore give an undertaking to the Spices Board that the waste material after the distillation of Cassia will be properly accounted and destroyed as per norms. (b) They are also directed to inform the Board well in advance the method and time/date(s) of the disposal of waste material to supervise/test check the same and (c) The input-output norms as specified in ALC Circular No. 9/92, dated 12th Aug., 1992 will have to be strictly adhered to. Sd/- (K.P.G. Menon) Director (Marketing) After completing the exports in question, M/s. Rekha Overseas in terms of para 2 (d) of the ALC circular produced the following Certificate dated 9-7-1993:- CERTIFICATE This is to certify that M/s. Rekha Overseas, 433, Pantheon Road, Egmore, Madras - 600 008 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome through oral evidence of the Board officials concerned. In respect of the test reports, it should have either come through retest of remnant sample at the Central Revenue Chemical Laboratory (New Delhi) or through oral evidence of the Chemical Examiner who issued the test reports. 4. It appears to us that, after noting that all the export documents were indicative of M/s. Rekha Overseas having fulfilled their export obligation under the DEEC Scheme, the Director of Revenue Intelligence lacked direction and intellgence to proceed to disprove what was certified by the Spices Board and reported by the Chemical Examiner. The Commissioner ought to have taken note of this erratic investigation. On the other hand, ld. Commissioner chose to act in the same wavelength. The Commissioner found the Spices Board officials to have been "tricked by M/s. Natcon into believing" that Cassia Oil was manufactured out of the imported Cassia and the waste generated out of the process was lying in the factory. However, he would not comment on the failure of DRI to expose the "trick". With regard to the test reports, ld. Commissioner observed that there was every reason to believe that these reports ..... X X X X Extracts X X X X X X X X Extracts X X X X
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