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TMI Blog2021 (2) TMI 398X X X X Extracts X X X X X X X X Extracts X X X X ..... ailed to discharge their export obligation in respect of the import of M.S.Scrap and they had availed benefit of Modvat on inputs used in exported goods whereas the said notification specifically barred availment of Modvat on inputs. The matter was adjudicated, the demanded of customs duty and additional Customs duty was confirmed and penalty of Rs. 2 lakh and redemption fine was also imposed to the tune of Rs. 3 lakh. The said order was challenged before this Tribunal and this Tribunal remanded the matter back to the adjudicating authority for considering the submissions of the appellant and again vide order dated 30.11.2005, the adjudicating authority denied the benefit of Notification No.83/90-Cus dated 20.3.1990 as amended by Notification No.116/93-Cus dated 4.5.1993, which prescribed the customs duty @ 12% ad valorem as they had fulfilled substantive conditions of the said notification i.e. that they had utilized imported HMS in their own factory for manufacture of M.S. Ingots which were cleared on payment of duty and that the Deputy Commissioner, Central Excise verified the consumption of HMS and issued end used certificate. The benefit of Notification 83/90-Cus w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hould be demanded now when it is adjustable against admissible modvat credit keeping in view Revenue neutrality as upheld by the Supreme Court judgments. 4. He further submits that the Revenue was very much in the knowledge of the relevant fact that the Licence issued by DGFT permits the appellant to import re-rollable scrap to the appellant imported duty free Heavy Melting scrap against, which is in violation of provisions of Notification No.203/92. Therefore, the conditions of Notification No.203/92 are not applicable to the facts of this case and the show cause notice has been issued to the appellant for violation of conditions of Notification No.203/92 on this ground which is beyond the scope of show cause notice and the same is to be set aside. 5. He further submits that as the import of the goods in terms of Notification No.203/92 was in the knowledge of the Revenue and also the benefit thereof was to given to the appellant. Therefore, the show cause notice issued to the appellant is barred by limitation. He also submits that end used certificate has been produced by the appellant which is substantive requirement of Notification No.83/90Cus, therefor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s to be construed strictly and the show cause notice has been rightly issued to the appellant as the appellant surrendered advance licence as the appellant failed to complete his export obligation. Therefore, the Revenue in its right perspective to raise the demand as it is well settled law that any benefit of exemption notification and following of its conditions has to be construed strictly. To support his contention, he relied on the following decisions:- (i) Hemraj Gordhandas vs. H.M.Dave-CCE-1978 (2) ELT 350 (ii) Rajasthan Spg. & Weaving Mills v.CCE-1995 (77) ELT 474 (SC) (iii) Uttam Industries vs. CCE-2011 (265) ELT 14 (SC) (iv) Pappu Sweets & Biscuits vs. Commissioner Trade Tax, Lucknow-2004 (178) ELT 48 (SC) 9. He further submits that after remand by this Tribunal, the appellant tried to take the advantage of another exemption notification without following the procedure and conditions of the exemption Notification No.83/90-Cus and for end use certificate issued by the Central Excise authorities in July, 1996 but none of the other conditions of the said notification viz. filing of bond for following the procedures thereunde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h sides. It is not in dispute that what was permitted under the DEEC licence was import of re-rollable scrap and what was imported is HMS. Under these circumstances, it will not be proper to extend the benefit of DEEC benefits for the said goods and also enforce the condition imposed under the concerned notification. Therefore, we find that the request of the Ld. Advocate for permitting them to pay the applicable duty on the HMS after extending the notifications which were in force merits consideration. However, we find that the issue thought has been raised at earlier stages, the Commissioner has not given a finding. Therefore, we deem it proper to set aside the order of the Commissioner and remand the matter to consider these pleas afresh after giving reasonable opportunity of hearing to the appellant. The plea on admissibility of credit CVD will also be considered by the adjudicating authority at the time of re-adjudication." 16. As per the order of this Tribunal, this Tribunal has given direction that the adjudicating authority shall consider the plea of admissibility of CVD will also be considered by the adjudicating authority. The appellant has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te is not produced and the appellant duty applicable at the time importation on the said goods. 19. The claim of the appellant is that they have produced end use certificate though late and claimed the benefit of the said notification. Therefore, in the facts and circumstances of the case, it is to be examined whether the appellant has complied with the conations under Notification No.83/90-Cus or not? 20. The substantial condition of the notification is that the imported goods are to be used in the manufacture of ingots which have been cleared on payment of duty. The other conditions are that the said goods to be used within six months if not then the time extension is required which can be granted. Further a bond in case failure to use goods and to execute the bond to utilize the goods in the manufacture of ingots which have been cleared on payment of duty. 21. In view of above discussion, it is coming out if end use certificate is produced that will qualify to comply all the conditions of Notification No.83/90-Cus as the extension of time is a procedural condition and execution of a bond is to safeguard the revenue in case of failure ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enefit of CVD which was entitled to them as modvat credit. We find that in the case of Mafatlal Industries Limited vs. CCE, Daman-2009 (241) ELT 153 (Tri.-Ahmd.) upheld by the Apex Court reported as 2010 (255) ELT a-77 (SC) to argue that the credit would have been available if CVD had been levied. In the said case involving Central Excise duty, the appellants and buyer unit were both owned by the same assessee. In that background, the Tribunal held that the situation was revenue neutral. Admittedly, in the present case, whatever CVD has been paid by the appellant, the CVD entitled as modvat credit. The contention of the Ld. Consultant is also acceptable. 27. In view of the above discussion, we grant the benefit of exemption notification no.83/90-Cus as amended to the appellant and is entitled modvat credit on CVD paid by the appellant being revenue neutrality. Therefore, we remand the matter back to the adjudicating authority for quantification of the demand, if any, in terms of above directions. 28. In view of this, the appeal is allowed by way of remand as discussed above. (ASHOK JINDAL) MEMBER (JUDICIAL) (SANJIV SRIVASTAVA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the notification. In case of Mihir Textiles vs Collector of Customs, Mumbai [1997 (92) ELT 9 (SC)] Hon'ble Supreme Court while holding that exemption benefit dependent upon satisfaction of certain conditions cannot be granted unless such conditions are complied with, even if such conditions are only directory laid down the law as follows: "Learned counsel contended that the importer is not to be blamed for non-compliance with the conditions prescribed in the entry because all what should have been done by them and what remained to be done was only that part which the authorities had to do in the matter. Obviously the aforesaid contention has no legs to stand at least in one case wherein no application was made at all for registration of the contract before the goods were cleared. In the other appeal it was submitted on behalf of the appellant that as a matter of fact the appellant had made the application before the goods arrived at the port. Counsel for the appellant invited our attention to a letter which appellant has addressed to "Ministry of Industry, Udyog Bhawan, Maulana Azad Road, New Delhi" as proof of such application. Learned Additional Solicitor Genera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d not mandatory. According to the counsel, the conditions prescribed, if interpreted strictly, would result in the denial of concessional reliefs which statute has conferred on the citizen. In support of that contention, counsel invited our attention to the decision of a Constitution Bench of this Court in State of U.P. vs. Manbodhan Lal Srivastava 1958 SCR 533, wherein their Lordships were considering the implication of non-compliance with the conditions provided in Article 320(3) of the Constitution on an order imposing punishment to a Government servant without reference to the Public Service Commission. While considering that question learned Judges made a reference to the Privy Council decision in Montreal Street Railway Company vs. Normandin AIR 1917 PC 142 and the Federal Court decision in Biswanath Khemka Vs. Emperor AIR 104 & FC 67. The Constitution Bench held that the provisions of Article 320(3) are not mandatory and non-compliance of those provisions does not afford any cause of action in a court of law. Privy Council in the above quoted decision has observed that the question whether provisions in a statute are directory or imperative depends upon the object of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s issued under Rule 8 of the Central Excise Rules and should be read along with the Act. The notification must be read as a whole in the context of the other relevant provisions. When a notification is issued in accordance with power conferred by the statute, it has statutory force and validity and, therefore, the exemption under the notification is as if it were contained in the Act itself. See in this connection the observations of this Court in Orient Weaving Mills (P) Ltd. v. Union of India, 1962 Supp 3 SCR 481 = AIR 1963 SC 98. See also Kailash Nath v. State of U.P., AIR 1957 SC 790. The principle is well settled that when two views of a notification are possible, it should be construed in favour of the subject as notification is part of a fiscal enactment. But in this connection, it is well to remember the observations of the Judicial Committee in Coroline M. Armytage v. Frederick Wilkinson, (1878) 3 AC 355, that it is only, however, in the event of there being a real difficulty in ascertaining the meaning of a particular enactment that the question of strictness or of liberality of construction arises. The Judicial Committee reiterated in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alls in the notification or in the exemption clause, has to be strictly construed. When once the ambiguity or doubt is resolved by interpreting the applicability of exemption clause strictly, the Court may construe the notification by giving full play bestowing wider and liberal construction. The ratio of Parle Exports Case (supra) deduced as follows: "Do not extend or widen the ambit at stage of applicability. But once that hurdle is crossed, construe it liberally". 47. We do not find any strong and compelling reasons to differ, taking a contra view, from this. We respectfully record our concurrence to this view which has been subsequently, elaborated by the Constitution Bench in Hari Chand Case (supra). 48. The next authority, which needs to be referred is the case in Mangalore Chemicals (supra). As we have already made reference to the same earlier, repetition of the same is not necessary. From the above decisions, the following position of law would, therefore, clear. Exemptions from taxation have tendency to increase the burden on the other unexempted class of tax payers. A person ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... however, indicates that while construing an exemption notification, the Court has to distinguish the conditions which require strict compliance, the non-compliance of which would render the assessee ineligible to claim exemption and those which require substantial compliance to be entitled for exemption. We are pointing out this aspect to dispel any doubt about the legal position as explored in this decision. As already concluded in para 50 above, we may reiterate that we are only concerned in this case with a situation where there is ambiguity in an exemption notification or exemption clause, in which event the benefit of such ambiguity cannot be extended to the subject/assessee by applying the principle that an obscure and/or ambiguity or doubtful fiscal statute must receive a construction favouring the assessee. Both the situations are different and while considering an exemption notification, the distinction cannot be ignored. 52. To sum up, we answer the reference holding as under - (1) Exemption notification should be interpreted strictly; the burden of proving applicability would be on the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the conditions of the notification No 83/1990-Cus. Hence the benefit of this notification cannot be extended to the appellants. 10. Now coming to the issue of revenue neutrality raised by the appellants now. In my view in these proceedings which are for consideration of the order passed in the remand proceedings with specific direction for consideration of claim to certain exemptions this issue could have been raised. Once Member (Judicial) has held that Tribunal has in earlier round decided issue for denial of exemption Notification No 203/92-Cus to the Appellants both on merits and on limitation, the issue in respect of demand made by the show cause notice has been foreclosed and could not have been raised in these proceedings. Secondly the revenue neutrality claimed by the Appellant's is not correct and contrary to the appeal filed by them. If the issue was revenue neutral than Appellant's would have paid the amounts due and taken the credit if admissible rather than pursuing and litigating the matter before various forums for more than twenty years. Hon'ble Supreme Court has in case of Star Industries [2015 (324) ELT 656 (SC)] state ..... X X X X Extracts X X X X X X X X Extracts X X X X
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