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TMI Blog2010 (10) TMI 301X X X X Extracts X X X X X X X X Extracts X X X X ..... A. Pursuant to investigations conducted by the DRI in or around August 2006, the authorities came to a tentative conclusion that the assessee was not entitled to exemption under Notification No. 43/2002-Cus. in respect of 2954.400 MTs of raw sugar of value Rs. 2,85,81,668/- involving duty of Rs. 2,59,39,995/-. A show cause notice was issued on 10-4-2007, alleging inter alia that the assessee had sold the white sugar manufactured from 21,300 MTs of raw sugar imported under the advance license and that it had incurred liability to pay appropriate duty of customs as well as penalty as the goods imported were rendered liable for confiscation under Section 111 of the Customs Act, 1962 (the Act). Adjudicating allegations raised in the show cause notice, the Commissioner of Customs, Visakhapatnam found that a quantity of 2466.250 MTs of white sugar exported by M/s. Emmsons International Ltd., (Emmsons) under Shipping Bill No. 1053189 dated 16-6-2006 was not eligible to be counted towards fulfillment of export obligation by M/s. NCS Sugars claimed by it as a third party export. He confirmed demand of exemption availed in respect of 2954.400 MTs of raw sugar working out to Rs. 2,59,39,995/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d into by the appellant with Emmsons would show that the entire quantity of sugar purchased from HSSK was meant for export and in compliance with the directions contained in the release order of the Directorate of Sugar. The appellants raised commercial invoice dated 27-6-2006 for export of 2466.250 MTs of sugar which showed the consignee as the Trading Corporation of Pakisthan, Karachi while the buyer was shown as Emmsons. The said commercial invoice provided for TT remittance of the export proceeds. In the Shipping Bill No. 1053189, Emmsons was shown as exporter and the appellants were shown as 'third party exporter'. It was submitted that in respect of a controlled commodity like sugar it was not possible to mention exporter itself as 'third party exporter' and to mention some other person as 'exporter'. There was no dispute that export proceeds were realized as per the Bank Realization Certificate (BRC) issued by the Indian Overseas Bank dated 4-12-2006 which contained a reference to exports made by Emmsons on account of the appellants, among others. It could be discerned from the BRC that an amount of Rs. 5,48,33,747/- out of a total of Rs. 28,13,31,308/- was export proceeds r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 0th March, 1994, under which exports by Advance Licence holders through third party were allowed, doubts were expressed by some of the Commissioners of Customs, whether and how the export through a third party by an Advance Licence holder under DEEC Scheme or EPCG holder could be counted for the purpose of discharge of export obligation of the licence holder. A view had been expressed that the definition of exporter under Section 2(20) and that of importer under Section 2(26) of the Customs Act, 1962 require that there can be only one importer/one exporter at a time for the goods exported or imported, as the case may be. The matter was discussed by the Board and the issue was also referred to the Law Ministry for opinion. 2. The Law Ministry have now clarified that Section 13 of the General Clauses Act, 1897 provides that unless there is any thing repugnant in the subject, words used in singular shall include the plural and vice-versa. 3. Accordingly the terms 'Exporter' and 'Importer' can be said to cover one or more than one exporter/importer of the goods within the meaning of Section 2(20) and Section 2(26) of the Customs Act, 1962. In view of Ministry of Law's opini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nged." It is also argued that there was no violation of conditions of Notification No. 43/2002-Cus. The appellants had submitted the required documents to the JDGFT to issue Export Obligation Discharge Certificate. As the assessee had complied with the conditions of the Notification, duty demand was not sustainable as also the liability to confiscation under Section 111(o) of the Act, found by the Commissioner. Consequently, no penalty was imposable. 3. During hearing, learned counsel for the appellants reiterated the grounds taken in the appeal. The learned SDR representing the revenue, vehemently contested the claim that the impugned exports could be considered to be in fulfillment of export obligation. 4. We have carefully perused the case records and considered the rival submissions. The subject proceedings were initiated to recover exemption availed by the appellants under Notification No. 43/2002 Cus., dated 19-4-2002. In so far as that quantity of raw sugar relatable to 2466.250 MTs of refined sugar exported under Shipping Bill No. 1053189 dated 16-6-2006, the Commissioner found that the appellants had not fulfilled the export obligation to the extent of 2466.25 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... possess an export order/GR form in its name. In the case of third party exports, the circuit of exports would be completed only when three parties, namely foreign buyer, seller (exporter) and export order holder (third party) were present. In the absence of any of these three, there was no third party export. The contract between M/s. NCS Sugars and Emmsons had shown M/s. NCS Sugars as the third party and the latter as exporter. According to the Commissioner, third party exports took place only when there were two exporters, one having goods for export and the other having export order. In this case Emmsons bought the sugar and exported. With this reasoning, the Commissioner found that the subject export did not contribute to fulfillment of export obligation under the Advance License issued to M/s. NCS Sugars Ltd. 4.1 The dispute involved in this case for decision is whether the appellant M/s. NCS Sugars had exported the quantity of white sugar manufactured from the raw sugar imported under the advance licence No. 0910019136 dated 30-6-2004 and specified in the said licence in discharge of the export obligation. There is no dispute that the assessee manufactured white sugar i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... le. 4.3 The assessee has argued that the failure to fulfill the export obligation occurred for the reason that sugar being a controlled commodity under the Essential Commodities Act, 1955, releases of all sugar by them were regulated by the orders issued by the Central Government under the above Act and Sugar (Control) Order 1966. We find that the impugned quantity of sugar was exported by Emmsons following the release order issued under the Essential Commodities Act, 1955. Therefore we reject the plea that the appellant was not able carry out the impugned export and discharge its obligation under the advance license owing to the control exercised by the Central Government under the Essential Commodities Act. In any case, the assessee cannot claim benefit of an exemption unless the conditions prescribed therefor are satisfied. It is also significant that the DGFT has not acknowledged the export as in discharge of export obligation till date though more than four years have elapsed after export by the appellant. We find that the raw sugar relatable to the sugar exported under Shipping Bill 1053189 dated 16-6-06 had been rendered liable for confiscation under Section 111(o) of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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