TMI Blog2019 (1) TMI 1099X X X X Extracts X X X X X X X X Extracts X X X X ..... ut payment of duty, is conclusive. The appellant also has bound itself, through the letter of undertaking, to observe the conditions of the exemption notification. Failure to comply is to be visited with the recovery of duty as undertaken in the bond. The provisions of section 11A of Central Excise Act, 1944 are not the sole source of recovery. The contract in the bond is sufficient to do so - Even if it is conceded that central excise officials were aware of the ineligibility of the appellant and recourse to section 11A of Central Excise Act, 1944 is not available, considering the circumstances of ineligibility and the commitment under the bond, demand of duty of ₹ 18,47,929 must be upheld. Considering that there is no demonstrate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner under chapter 9 of EXIM Policy 1997-2002 notified by Director General of Foreign Trade under the Foreign Trade (Development Regulation) Act, 1992 for the period from 24th June 2002 to 1st January 2004 when the relevant notification, issued under section 5A of Central Excise Act, 1944, was amended to deprive duty exemption to trading units. A brief background would assist in illuminating the contours of the dispute. 2. The appellant was issued with permission to operate under the 100% Export Oriented Unit scheme in the EXIM Policy on 11th July 2001 for trading in specified goods. In 2002, the policy underwent a change to encompass only manufacturing units within the ambit of the scheme; trading units, that had hitherto b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ading by the trading units which were in existence prior to the 31st March, 2002 and having valid letter of permission to continue under the Export Oriented Undertaking Scheme 4. In the meanwhile, the appellant had continued to procure inputs for export activities in compliance with the procedure established for the purpose. While giving effect to the amendment supra, the Central Board of Excise Customs vide circular no. 6/2004-Cus dated 27th January 2004, also clarified that the amendment to the notification did not have retrospective effect following which proceedings were initiated against the appellant leading to the impugned order in the fullness of time. 5. According to Learned Counsel, the appellant was in compliance with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ailable, notwithstanding any policy statement of the Central Government, only through a valid notification issued under section 5A of Central Excise Act, 1944 and it is clear, beyond all doubt, that the two notifications cited supra did not envisage exemptions for trading units. That this was a deliberate omission is apparent from the addition to the exemption notification in 2004 in the context of a policy decision that has been elaborated upon in the circular of 2004 issued by Central Board of Excise Customs supra. Even if the said circular did not emphasise the prospective nature of the amendment, it is well-settled in law that exemption notifications should be interpreted by the letter of the law. The conscious act of excluding tra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umentation received from the buyer of the goods when the goods were cleared. In the present dispute, the goods were obtained against CT-3 documentation issued to the appellant by claiming the privilege under Letter of Permission. 10. The liability to make good the duty foregone, in the event of ineligibility for procurement without payment of duty, is conclusive. The appellant also has bound itself, through the letter of undertaking, to observe the conditions of the exemption notification. Failure to comply is to be visited with the recovery of duty as undertaken in the bond. The provisions of section 11A of Central Excise Act, 1944 are not the sole source of recovery. The contract in the bond is sufficient to do so. 11. Even if it is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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