TMI Blog2014 (12) TMI 811X X X X Extracts X X X X X X X X Extracts X X X X ..... h September, 2009 for import of sugar. The appellant misconceived the intent of this circular to submit that it has operated under “grain-to-grain” basis and not under “ton to ton” basis. Further the appellant misconceived that its advance authorisation being issued in 2005, there is no embargo on the appellant to export sugar without release order. No licence was given to it to operate under grain-to-grain basis as is clear from the letter of DGFT. Appellant also misconceived that signing of the bond, etc. exonerated it from operating under “ton-to-ton” basis. There was further misconception by it that the bond executed by the appellant required recovery of the duty element in terms of Notification No. 93/2004-Cus., dated 10-9-2004 in case of non-fulfilment of export obligation. It was also pleaded that the appellant operated under actual user scheme. All such pleas are irrelevant and appellant was not an innocent but deliberately violated condition of advance authorisation. It may be stated that when the appellant was categorically found to have violated the export norm as has been stated by the Directorate of Sugar in its letter dated 23rd June, 2011, the inescapable conclusi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pur Sugar Mills Ltd.) during the period July August, 2010 was contrary to any legal prohibition, and (2) Whether adjustment of export (effected without proper release order) by the Directorate of Sugar at a late date can be accepted as release of prohibition on the date of export. Submissions of appellant 3.1 Arguing the appeal, it was submitted on behalf of the appellant that advance authorisation was issued on 14-3-2005, to import raw sugar under actual user condition. Import was accordingly made during the year 2005-06. Appellant exported aforesaid quantity of sugar in July/August, 2010. The authorisation being issued under actual user scheme, appellant was not required to export sugar manufactured out of imported raw sugar only. Actual user condition is fulfilled if imported raw sugar is used in the factory without diverting the same elsewhere. Further, Advance Authorisation was issued for export of sugar under grain-to-grain basis and no release order from Sugar Directorate was required for export. 3.2 It was also submitted by the appellant that definition of the terms actual user is given under para 9.5 of Foreign Trade Policy (2004-2009) suggesting that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etter dated 23-6-2011 of the Directorate of Sugar addressed to the Draw Back Authority, Department of Revenue, Ministry of Finance was invited. The appellant says that the Authority considered the export of 2496 MT sugar to be adjusted against the release order, dated 29-9-2010 and 8-10-2010 as well as 25-11-2010 and no adverse view was taken by that Authority against the appellant. 3.7 Further stand of the Appellant is that Revenue misconceived that release order in respect of 2496 MT of sugar was required in absence such mandate in law and further misconceived that imported sugar should necessarily be used in manufacture of exportable sugar. This is appreciable from the time extended upto 2011 to discharge export obligation under the advance authorization issued. When the authority allowed export to be made in July to Aug., 2010 against import of raw sugar made in 2005, extending the period upto 2011, it cannot be said that the appellant has not discharged its export obligation out of the imported sugar. 3.8 With above submissions, appellant s plea was that it operated under advance authorization issued on 14-3-2005 and was not subject to 2009 Notification as well as circul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order for export was sine qua non. 4.3 Relying on the adjudication order, Shri Batra submits that the allegation in the show cause notice was established from the post-export regularization order issued to the appellant by the Sugar Directorate, proving that all along the export of sugar during July, 2010 was governed by Ton to Ton basis policy for which the Adjudicating Authority in para 4.16 of the order came to the conclusion that the appellant was required to obtain release order to export 2496 MT of sugar. In absence of such order, there was violation of the conditions of the export policy. 4.4 As per the lincensing Note-1 of the Chapter 17 of Schedule-2 to export policy under Foreign Trade Policy, 2004-09 export of the sugar except the preferential quota sugar to EU USA was allowed subject to the condition that exporter was required to obtain an export release order from the Chief Director (Sugar), Directorate of Sugar or any other officer authorized by the Chief Director (Sugar) for export of sugar whether under Open General License or Advance Authorization Scheme on ton-to-ton or any other scheme permitting export of sugar. The condition of the licence issued to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r was exported by the appellant without obtaining release order from that Authority. This established that release order was sine qua non for the export of above quantity of the sugar. The plea that the export is covered under grain-to-grain policy was discarded by the Directorate. Request of appellant to adjust the quantity of 2496 MT against the future release order was allowed to discharge export obligation for 19,732 MTs. The authority categorically stated in the aforesaid letter that the directorate was not aware of the above lapse and export of 2496 MT of sugar without release order. The release order dated 29-9-2010, 8-10-2010 and 25-11-2010 issued by the Directorate was with another condition that whether 2496 MT was still lying un-exported was to be verified. 9. When the advance authorisation was issued that was subject to the condition as has been quoted herein before. There was no indication therein that the authorisation was subject to the condition of grain-to-grain basis. But the Appellant misconceived such proposition while it was allowed to operate under actual user scheme and under ton-to-ton basis only. The JDGFT in terms of a Policy Circular No. 1 (RE-20 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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