BHARTI TELECOME LIMITED Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) The appellant imported Polypropylene under the Value Based Advance Licensing Scheme and availed of duty free clearance of the goods claiming exemption under Notification No. 203/92 dated 19th May, 1992. According to the department, the appellant was not entitled to the benefit of duty free import as it had violated condition no. (V) (a) of the said notification. That condition was that the export obligation should have been discharged by exporting goods manufactured in India in respect of which no input stage credit is obtained under Rule 56A or 57A of the Central Excise Rules, 1994.

(2.) The department by show cause notice dated 3rd September, 1997 alleged that the appellant had suppressed the fact that it had availed of Modvat Credit on the inputs used in the manufacture of the exported goods for wrongly availing duty free benefit against the licence.

(3.) The appellant in response to the show cause notice stated that the advance licence was obtained by it on 1st June, 1993 and it had completed the export obligations by July, 1993. The appellant claimed that it had reversed the Modvat Credit and rectified the error in their records as far back as in January - February 1994. It was further claimed that the circular dated 3rd January, 1997 issued by the Central Board of Excise and Customs had relaxed the conditions of Notification No. 203/92 in cases where the exporter reverses the Modvat Credit incorrectly availed of by him with payment of interest at the rate of 20% of the amount of the modvat credit. In this view, the appellant sought cancellation of the show cause notice and dropping the charges made against it in the said notice.