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M/s Alfa Ica (India) Ltd. Versus Commissioner of Customs (E) , Mumbai

2018 (2) TMI 247 - CESTAT MUMBAI

Import of base paper by availing DEEC exemption - It was alleged that no nexus in the imported goods and exported goods - demand only on the ground that material use for export was white base paper whereas the material imported the paper was having design/colour - Held that: - Circular No. 39/97-Cus. dated 16.09.1997 clearly prescribed that it is not necessary that the goods imported should match exactly those used in the export product provided that the inputs are commercially known to be useab .....

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Ramesh Nair, Member (Judicial) And Shri Raju, Member (Technical) Shri Paritosh Gupta, Advocate for Appellant Shri M.K. Mall, Assistant Commissioner (A.R.) for Respondent ORDER Per: Raju: This appeal has been filed by M/s Alfa Ica (India) Ltd. against demand of Customs duty on the imports made under DEEC licence. 2. Learned Counsel for the appellant informed that they have imported base paper by availing DEEC exemption under Notification No. 30/97-Cus & 31/97-Cus. A show-cause notice was iss .....

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eged that no nexus in the imported goods and exported goods. The demand was confirmed by the Original Adjudicating Authority vide order dated 25.11.2004. The matter was filed by the Revenue before Commissioner (Appeals) who vide order dated 30.01.2006 set aside the appeal by way of remand to the Adjudicating Authority on the ground of non-application of mind. The matter was re-adjudicated by the Adjudicating Authority who confirmed the demand vide order dated 21.08.2008. The said order was uphel .....

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ng extended period of limitation just one day prior to date of issue of the Order-in-Original in identical matter dropping the demand. He argued that the Revenue also believed at the material time that the goods had been rightly imported, as identical matter was dropped by Order-in-Original dated 23.06.2004. 3.1 Learned Counsel also relied on CBEC clarification issued by Circular No. 36/97-Cus. dated 16.09.1997. In the said clarification it has been stated that These instruction clearly spell ou .....

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only on the ground that material use for export was white base paper whereas the material imported the paper was having design/colour. We find that Circular No. 39/97-Cus. dated 16.09.1997 clearly prescribed that it is not necessary that the goods imported should match exactly those used in the export product provided that the inputs are commercially known to be useable in the product exported. We also find that the Order-in-Original dated 23.06.2004 passed by the Adjudicating Authority deals wi .....

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haracteristics of the base paper. Hence this particular term will always be susceptible to various interpretations and leaves a wide discretion in the hands of the officers to pick and choose some of the characteristics and consider them as the main technical characteristic and leave others considering them insignificant. Hence insistence on very close nexus may open a pandora's box where there will be no end to the parameters for deciding the technical characteristics. This may also not be .....

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ng its commercial demand and not a technical characteristic. The whole dispute seems to revolve around the definition and scope of the word "material required" and "technical characteristics and quality" as appearing in the different notifications pertaining to the DEEC/Advance Licence Scheme. This has always been the matter of dispute in the field formations due to different interpretations of these words. As a result the trade as well as the officers have faced difficulties .....

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ct, as export product could be manufactured from inputs procured from out side the duty exemption scheme. However, the goods imported should be those which could have been used in the export product, i.e. goods of a kind which are commercially known to be used in the export product and covered by description of inputs in the licence. It is further clarified that the field formations should not establish a close nexus with reference to the quality and specification of inputs. It will be necessary .....

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duty free benefits under the duty exemption schemes. In other words, the goods should be such or of a kind which is commercially known to be used in the export product and are covered by the description of inputs mentioned in the licence. Same views were also reaffirmed by Circular No. 36/97 dated 16.9.97. In the said circular, it was clearly held that the correct interpretation of the word "raw material required for use" does not mean that raw material must be physically incorporated .....

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