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M/s Nirma Limited Versus Commissioner, Customs & Central Excise, Ahmedabad

2015 (10) TMI 281 - CESTAT AHMEDABAD

MODVAT credit - Denial of exemption benefit under Advance Licence - Invocation of Rule 57E - Held that:- Adjudicating authority rejected the claim of the Appellant on the ground that the Rule 57E of the erstwhile Central Excise Rules, 1944 has put a bar for availing MODVAT Credit on account of fraud, collusion, or any willful mis-statement or contravention of any rules. It is observed that the said Company has contravened the provisions of Customs Act as well as EXIM Policy and therefore, they a .....

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ellant: Shri M.A. Patel, Consultant, Shri Anand Nainawati, Advocate For The Respondent: Dr. Jeetesh Nagori, Authorised Representative Per: P.K. Das 1. The relevant facts of the case, in brief, are that one M/s Core Healthcare Limited (i.e. the Company) imported duty free material by availing exemption benefit under Advance Licence. They failed to fulfill the export obligations and therefore, the Customs authorities raised the demand of duty on the duty free imported material. The said Company fi .....

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4 lakhs. There was also direction to pay the interest @ 10% per annum (excluding CVD portion). There is immunity from fine, penalty and prosecution. Thereafter, the Appellant Company filed an application dt.03.01.2008 to the Assistant Commissioner of Central Excise to allow them MODAVAT/CENVAT Credit of ₹ 822.89 lakhs paid by them towards CVD. The Adjudicating authority rejected the application dated 03.01.2008 and disallowed the MODVAT/CENVAT Credit of ₹ 822.89 lakhs. By the impugne .....

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hile Central Excise Rules, 1944, the Appellants are not eligible to avail MODVAT Credit. He submits that both the authorities below had not looked into the statement of payment of CVD enclosed with their letter dt.03.01.2008. He further submits that there is no fraud or mis-statement etc as held by the Settlement Commission order and therefore, Rule 57E of erstwhile Rules cannot be invoked. He drew the attention of the Bench to the relevant statement filed by them before the Adjudicating authori .....

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pellant filed the appeal before the High Court and Supreme Court. He submits that the Appellant till date has not paid interest as per the direction of the Settlement Commission and therefore, they are not eligible to get any benefit from the Settlement Commission order. 4. On rejoinder, the learned Advocate submits that the Appellant filed an appeal before the Hon ble Supreme Court against the demand of interest which was rejected by the Hon ble Court. It is submitted that the Department has no .....

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contravened the provisions of Customs Act as well as EXIM Policy and therefore, they are not entitled for MODVAT Credit. In this context, we reproduce the findings of the Settlement Commission as under:- 14. There is no dispute that the exports have not taken place. The issue is only non-availability of the BRC because of which the claims are being denied. BRC is issued by the Bank through whom the export documents have been negotiated to prove that the export proceeds in relation to the partic .....

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ports proceeds realization was the duty of DGFT and the DGFT on the basis of collateral evidence i.e. Banks and Chartered Accountant Certificates have accepted this as a proof of realization of export proceeds. There is substantial compliance and mere non-availability of BRC cannot be a ground for rejecting the contention of the applicant. The applicant had filed the application No.1 on its own accord, wherein out of the 36 Advance Licences, SCNs were issued only in respect of 5 licences only. T .....

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ategorical finding on the bonafide of the Appellant. There is no material available on malafide or mis-statement of fraud, etc on the part of the Appellant. Hence, in our considered view, the claim of the Appellant cannot be barred under Rule 57E of erstwhile Rules. 7. Learned Authorised Representative for the Revenue drew the attention of the Bench to Para 11.4 of the order of the Settlement Commission. Revenue submitted before the Settlement Commission that according to JDGFT the total liabili .....

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