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TMI Blog2012 (7) TMI 838X X X X Extracts X X X X X X X X Extracts X X X X ..... he goods imported into India were exempted from basic customs duty and additional customs duty under S. No. 217 of Notification No. 21/2002-Cus., dated 1-3-2002 subject to Condition No. 32 of the Notification which read as under :- "32. If, - (a) the goods are imported by an Indian Company or Companies, a Foreign Company or Companies, or a consortium of an Indian Company or Companies and a Foreign Company or Companies (hereinafter referred to as the "contractor") or a sub-contractor of such Company or Companies or such consortium and in each case in connection with petroleum operations or coal bed methane operations, as the case may be, to be undertaken under a contract signed with the Government of India, on or after the 1st day of April, 1998, under the New Exploration Licensing Policy, or on or after the 1st day of April, 2001 in terms of the Coal Bed Methane Policy, as the case may be; (b) where the importer is a contractor, he produces to the Deputy Commissioner of Customs or the Assistant Commissioner of Customs, as the case may be, at the time of importation, the following, namely :- (i) a certi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n this sub-clause shall apply if such sub-contractor is an Indian Company or Companies." 3. While clearing the goods under the corresponding exemption under Notification 6/2006-C.E. for excise duty exemption, the appellant did not produce any certificate to show that the person to whom they were supplying the goods could have imported goods free of customs duty as per the provisions of Customs Notification No. 21/2002-Cus. at Sl. No. 217. Therefore, Revenue was of the view that the appellants were not eligible for the said exemption and they issued show cause notice demanding excise duty to the tune of Rs. 2,72,15,266/- along with interest and penalty. After due process the demands were confirmed along with interest and penalty under Section 11AC of the Central Excise Act equal to the amount of duty confirmed. 4. The counsel for the appellants argues that the conditions specified in the customs notification is to be fulfilled only when the goods are imported. In his view for claiming excise duty exemption what is required is to see whether the goods fall within the description of the goods as specified in item 15 List 12 of the Notification which reads as "(15) All type ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the factory should not be a reason to deny the exemption. 6. The counsel for the appellant also submits that the show cause notice was issued on 9-1-2009 for clearances made during the period April, 2007 to November, 2008 and therefore substantial portion of the demand is time-barred. 7. He further pleads that there has been no deliberate suppression on the part of the appellant to evade payment of duty inasmuch as they claimed the exemption which was actually available for the goods in question, though there might have been some minor shortfall in not producing the certificate before clearance. Therefore, he submits that there is no ground at all for imposing penalty on the appellant alleging suppression with intent to evade payment of duty. 8. Opposing the prayer of the appellants, the learned AR for the Revenue submits that for getting goods to qualify for the exemption under Notification No. 6/2006-C.E., dated 1-3-2006, the appellants had to make sure that if such goods were to be imported by their suppliers they would have been eligible for exemption from customs duty. For availing exemption from Customs Notification No. 21/2002-Cus. they have to produce cer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conditions that are appearing in the customs notification has not been adapted to suit claiming excise duty exemption. There is necessity for making changes if the exemption from excise duty is to be meaningful. In the first place, there is no importer involved when goods are manufactured in India are supplied in India. Similarly customs assessment and duty payment are before clearance of the goods whereas for excise levy the system is of self assessment and duty payment at the end of the month. So the requirement of producing the certificate also needed suitable change. Similarly, customs notification is applicable to a contractor or a sub-contractor when they import goods. So confusion arises as to who has to satisfy the condition whether the manufacturer of the goods or the purchaser. Comparing with the situation of imports the purchaser has to satisfy the condition. But these are all logical interpretations and not explicitly provided in the notification. When goods are imported by the contractor or sub-contractor, the end-use verification becomes easy with reference to the auditing the books of account of these persons. A mechanism will be required to ensure proper end-use in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng and Indus. Ltd. also the situation was different. In that case the importer filed documents for clearing a rig was cleared without filing Bill of Entry and later the importer wanted to regularize the import by filing Bill of Entry and Essentiality Certificate needed for claiming an exemption. The certificate was not even applied for when the goods were imported. In this case the approvals as necessary from government is stated to be available at least with the buyer of the goods, which is the requirement as we see it, as on the date of clearance of the goods and the issue is only about submission of the same. 16. In the facts of this case there is a justifiable reason to hold so because there can be some doubt about the time of production of certificate for excisable goods because the condition comes through adaption of condition prescribed in a customs notification. This case involves a substantial right of the appellant to claim an exemption intended for import substitution at competitive prices we are of the view that the exemption cannot be denied for the reason that the certificate is produced later. We have not verified the certificates in detail. We are remitting th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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