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2019 (3) TMI 1450 - CESTAT AHMEDABADAdvance Authorisation Scheme - non-fulfillment of export obligation - import of duty free material against advance licence for manufacture of goods for export or deemed export - It was alleged that the materials imported duty free but which were in excess of the actual requirement were not exempted from payment of duty and were required to suffer custom duty - Held that:- It is not in dispute that the appellant assessee had procured the goods under Advance authorisations as per SION Norms. The imported material was used/ consumed in manufacture of export goods and the export obligations against the Advance authorisations stands fulfilled. The SION Norms has been promulgated in order to ward off the disputes pertaining to consumption of inputs. Once the norms are fixed, it is imperative for the assessee to follow such norms. If the assessee is not able to produce the goods as per the said norms and fails to fulfil the export obligation, he is liable to pay the customs duty covered by the advance authorisations. Once the SION Norms are fixed and the manufacturer has manufactured goods under the said norms and the export obligation stands fulfilled the revenue cannot demand duty on the ground that the actual consumption was less than SION. If such practice is adopted, it will lead to SION becoming redundant and it will open Pandora box of disputes. The SION Norms has been fixed after taking into consideration all the relevant factors and the overlooking of the same is not permissible. The whole purpose of fixing the SION norms is to avoid physical check of actual consumption of inputs in the manufacture of final products. For that very reason there is no mechanism provided for check or audit of actual consumption of imported goods if the same is covered under the SION norms. Once the importation of goods was permitted in terms of SION Norms and the export obligation stands fulfilled, the appellant were entitled to use the remaining goods in manufacture of goods which were cleared into DTA. We also find that the appellant have not suppressed any fact and the utilisation of the imported material and manufacture of finished goods stands recorded in their records as well as shown in monthly returns - the demands raised against the appellant are also hit by limitation of time. Appeal allowed - decided in favor of appellant.
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