Fresh Laboratories vs Commissioner Of Customs (Exports) ... on 14 January, 2011
In the case of Usha Intercontinental (supra), merchant-exporters had imported certain raw materials under the DEEC Scheme claiming the benefit of Notification No. 159/90-Cus. Those goods were imported as replenishment for the use in exported product. It was found that the party had availed MODVAT credit on the input used in the production of the resultant product. Under para 250- (2) of the relevant Exim Policy, there was a bar against sale of the imported goods if MODVAT credit had been taken on the inputs used in the exported product. As the party had sold the raw material imported by them, the benefit of the above Notification was denied to them inasmuch as one of the conditions of the Notification barred availment of MODVAT credit on inputs used in the export product if the raw material imported by way of replenishment under the advance licence was to be disposed of by sale.