MMTC LTD. Vs. COMMISSIONER OF CUSTOMS, VISAKHAPATNAM

JUDGEMENT

(1.) THIS application seeks waiver and stay in respect of the adjudged dues. The impugned demand of duty arises out of denial of the benefit of Notification No. 32/2005 -Cus., dated 8 -4 -2005 in respect of RBD Palmolein imported by the appellant under Target Plus Scheme. Under the Scheme as embodied under the Foreign Trade Policy (para 3.7) read with para 3.2.5(II) of the Handbook of Procedures Vol. II 2004 -2009, the importer was entitled to use the credits which accrued to them from exports of goods falling under the same product group. The appellant had exported various products including Rice, Wheat and Maize under the Scheme and had accordingly acquired a total credit of about Rs. 119 crores. They imported Palmolein during August, 2008 by making use of this credit in terms of the aforesaid Notification. The ld. Commissioner, in adjudication of a show -cause notice which was issued to the appellant for denying the benefit of the Notification and recovering duty on the imported item on the ground that the imported item did not have any nexus with the exported goods, confirmed the demand of duty against the appellant, confiscated the imported goods with option for redemption against payment of fine, and imposed a penalty on them.

(2.) 1 Arguing for waiver and stay in respect of the adjudged dues, the learned counsel has made the following submissions : - (a) The goods imported by the appellant fulfilled the condition of broad nexus with the exported goods as required under the Foreign Trade Policy and hence the benefit of the Notification should be admissible; (b) The Boards Circular No. 21/2007 -Cus., dated 8 -5 -2007 which was heavily relied on by the adjudicating authority for holding that a product -to -product nexus was required was quashed by the Honble Bombay High Court in the case of Essel Mining and Industries Ltd. v. UOI [2011 (270) E.L.T. 308 (Bom.)] and therefore the decision rendered by the Commissioner by placing reliance on the Circular will not be sustainable in law; (c) The appellant fulfilled the actual user condition inasmuch as the commodity imported in bulk was got repacked into one litre packs by availing the services of supporting manufacturers and this activity amounted to manufacture and therefore the contra view taken by the Commissioner is untenable; (d) The longer period of limitation is not invokable in this case as the appellant was under the bona fide belief that they were eligible for the benefit of Target Plus Scheme. 2.2 Elaborating the above points, the learned counsel has invited our attention to the relevant provisions of the Input -Output Norms laid down under the Foreign Trade Policy. He submits that Rice, Wheat etc. figuring at Sl. No. E -38 and Palmolein figuring at Sl. No. E -122 are both falling in the same chapter titled Food Products and therefore the broad nexus test embodied in para 3.2.5(II) of the Handbook of Procedures stands passed in this case in favour of the appellant and therefore there is no reason whatsoever to deny the benefit of the Target Plus Scheme to the appellant.

(3.) WE have heard the learned Commissioner (AR) also who has opposed the present application on the strength of the findings recorded by the adjudicating authority.