Custom, Excise & Service Tax Tribunal
M/S Nirma Limited vs Commissioner, Customs & Central ... on 18 March, 2015
In The Customs, Excise & Service Tax Appellate Tribunal West Zonal Bench At Ahmedabad Appeal No.E/1800/2009-DB [Arising out of OIA No.322/2009(Ahd-II)CE/CMC/Commr(A)/Ahd, dt.17.09.2009, passed by Commissioner (Appeals) of Central Excise, Ahmedabad] M/s Nirma Limited Appellant Vs Commissioner, Customs & Central Excise, Ahmedabad Respondent
Represented by:
For Appellant: Shri M.A. Patel, Consultant, Shri Anand Nainawati, Advocate For Respondent: Dr. Jeetesh Nagori, Authorised Representative For approval and signature:
Honble Mr. P.K. Das, Member (Judicial) Honble Mr. H.K. Thakur, Member (Technical)
1. Whether Press Reporters may be allowed to see the No Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
2. Whether it should be released under Rule 27 of the No CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
3. Whether their Lordships wish to see the fair copy of Seen the order?
4. Whether order is to be circulated to the Departmental Yes authorities?
CORAM:
HONBLE MR. P.K. DAS, MEMBER (JUDICIAL) HONBLE MR. H.K. THAKUR, MEMBER (TECHNICAL) Date of Hearing/Decision:18.03.2015 Order No. A/10246 / 2015, dt.18.03.2015 Per: P.K. Das
1. The relevant facts of the case, in brief, are that one M/s Core Healthcare Limited (i.e. the Company) imported duty free material by availing exemption benefit under Advance Licence. They failed to fulfill the export obligations and therefore, the Customs authorities raised the demand of duty on the duty free imported material. The said Company filed application before the Settlement Commission to settle the case. Subsequently, Hon'ble Gujarat High Court by Order dt.01.03.2007, in Civil Petition no.9 of 2006, allowed de-merger and Transfer of undertaking of the said Company to the Appellant Company. By Order No.434-435/FINAL ORDER/CUS/MGR/2007, dt.27.11.2007, the Settlement Commission held that the said Company had paid the admitted duty liability of Rs.27,89.925.00 and they have directed to pay the balance amount of Rs.8.34 lakhs. There was also direction to pay the interest @ 10% per annum (excluding CVD portion). There is immunity from fine, penalty and prosecution. Thereafter, the Appellant Company filed an application dt.03.01.2008 to the Assistant Commissioner of Central Excise to allow them MODAVAT/CENVAT Credit of Rs.822.89 lakhs paid by them towards CVD. The Adjudicating authority rejected the application dated 03.01.2008 and disallowed the MODVAT/CENVAT Credit of Rs.822.89 lakhs. By the impugned order, the Commissioner (Appeals) upheld the Adjudication order.
2. The learned Advocate on behalf of the Appellant submits that the Commissioner (Appeals) rejected the appeal on a new ground in so far as that there was no provision for claiming CENVAT Credit of Rs.8,22,89,220.00 under MODVAT/CENVAT Credit Rules. He submits that the Adjudicating authority rejected the claim on the ground that the Appellant had not paid the CVD at all and it is also stated that as per the Rule 57E of erstwhile Central Excise Rules, 1944, the Appellants are not eligible to avail MODVAT Credit. He submits that both the authorities below had not looked into the statement of payment of CVD enclosed with their letter dt.03.01.2008. He further submits that there is no fraud or mis-statement etc as held by the Settlement Commission order and therefore, Rule 57E of erstwhile Rules cannot be invoked. He drew the attention of the Bench to the relevant statement filed by them before the Adjudicating authority.
3. On the other hand, the learned Authorised Representative drew the attention of the Bench to the relevant portion of the Settlement Commission order to substantiate that the Appellant paid only the Basic Customs Duty. There is no evidence available that the Appellant paid the CVD. He submits that the statement placed by the learned Advocate is unsigned and not supported by any material and therefore, the Adjudicating Authority rightly rejected the said claim. He further submits that the Appellant filed the appeal before the High Court and Supreme Court. He submits that the Appellant till date has not paid interest as per the direction of the Settlement Commission and therefore, they are not eligible to get any benefit from the Settlement Commission order.
4. On rejoinder, the learned Advocate submits that the Appellant filed an appeal before the Honble Supreme Court against the demand of interest which was rejected by the Honble Court. It is submitted that the Department has not given the calculation of the demand of interest till date and therefore, they are unable to pay the interest.
5. After hearing both the sides and on perusal of the records, we find that the Adjudicating authority rejected the claim of the Appellant on the ground that the Rule 57E of the erstwhile Central Excise Rules, 1944 has put a bar for availing MODVAT Credit on account of fraud, collusion, or any willful mis-statement or contravention of any rules. It is observed that the said Company has contravened the provisions of Customs Act as well as EXIM Policy and therefore, they are not entitled for MODVAT Credit. In this context, we reproduce the findings of the Settlement Commission as under:-
14. There is no dispute that the exports have not taken place. The issue is only non-availability of the BRC because of which the claims are being denied. BRC is issued by the Bank through whom the export documents have been negotiated to prove that the export proceeds in relation to the particular exports have been realized through the Banking Channels, but absence of BRC cannot necessarily lead to conclusion that export proceeds have not been realized. The Revenue or DGFT have not produced any XOS (Export Outstanding) Statement issued by RBI or authorized dealer (Bank in this case) wherein it has been specifically mentioned or highlighted that export proceeds in respect of particular exports have not been realized. Further, Revenue had all along been contending that monitoring of exports proceeds realization was the duty of DGFT and the DGFT on the basis of collateral evidence i.e. Banks and Chartered Accountant Certificates have accepted this as a proof of realization of export proceeds. There is substantial compliance and mere non-availability of BRC cannot be a ground for rejecting the contention of the applicant. The applicant had filed the application No.1 on its own accord, wherein out of the 36 Advance Licences, SCNs were issued only in respect of 5 licences only. The bonafide of the applicant can also be seen from the fact that after filling the application (No.1) dated 11.02.2000, the applicant filed Misc. Application dt.21.08.2000 admitting additional duty of Rs.97.35 lacs on account of non-realisation of export proceeds in a few licences. Further, the default in achieving the export obligation was not due to any fault of the applicant, but due to non-realisation of export proceeds from the foreign buyers.
6. The Settlement Commission has given a categorical finding on the bonafide of the Appellant. There is no material available on malafide or mis-statement of fraud, etc on the part of the Appellant. Hence, in our considered view, the claim of the Appellant cannot be barred under Rule 57E of erstwhile Rules.
7. Learned Authorised Representative for the Revenue drew the attention of the Bench to Para 11.4 of the order of the Settlement Commission. Revenue submitted before the Settlement Commission that according to JDGFT the total liabilities on account of advance licence pertaining to Rs.1698.52 lakhs (without interest). The Departments claim is 1948.95 lakhs. It is also contended that JDGFT in their calculation has taken into account, only the Basic Customs Duty and they have considered only the amount to the extent of duty foregone on account of Basic Duty. The main contention of the learned Authorised Representative is that the Appellant had not paid the CVD and therefore, there is no question of acceptance of the claim. It is contended by the Appellant that they paid the amount of Rs.822.89 lakhs CVD as detailed in Annexure IV, V and VI of the application dated 03.01.2008. The Adjudicating authority observed that the said annexures/statement does not bear any signature of any authorized person. It is also observed that no calculation about the bifurcation of the duty has been shown in the annexure as to how they have arrived at a particular figure. We have noticed that the said annexures were the part of the claim application dt.03.01.2008. The said annexures were rejected on the ground that the said documents were unsigned. In our considered view, the Appellant should be given an opportunity to place statement with supporting material before the Adjudicating authority for verification of the claim in the interest of justice.
8. In view of the above discussion, we set aside the impugned order. The matter is remanded to the Adjudicating authority to examine the claim of payment of CVD by the Appellant. The learned Authorised Representative submits that the Appellant would also satisfy the Adjudicating authority regarding the use of the material. In any event, we direct the Adjudicating authority to decide the claim on the basis of records and as per relevant rules as it existed during the material period. The appeal is allowed by way of remand.
(Dictated & Pronounced in Court) (H.K. Thakur) (P.K. Das) Member (Technical) Member (Judicial) cbb 6