CIMMCO BIRLA LTD. Vs. COMMISSIONER OF CUSTOMS, MUMBAI

JUDGEMENT

(1.) For reasons recorded below we waived the pre -deposit of duty of Rs.14,94,824/ - and penalty of Rs.75,000/ -, stayed recovery thereof, and proceeded to dispose of the appeal itself with the consent of both sides.

(2.) The appellants herein are manufacturers of railway wagons classifiable under Chapter 86 of the Schedule to the Central Excise Tariff Act, 85. They received orders for supply of railway wagons from M/s. NTPC Ltd., New Delhi under a project financed by Asian Development Bank (ADB)/International Bank for Reconstruction and Development (IRDA). They imported duty free inputs for the manufacture of wagons under a Special Imprest Licence (SIL) dt.21.7.93 issued under paragraph 65 of the Export -Import Policy 1992 -97. A SCN dt.29.1.99 was issued to the appellants proposing to recover duty and to impose penalty on the ground that while the appellants were availing the benefit of Advance Licence under Notification No.203/92 -Cus dt.19.5.92 wherein one of the conditions was that no input stage credit under Rule 57A should be taken, they availed inputs stage credit and were, therefore, not entitled to the benefit of duty free import. The notice also proposed confiscation of the imported goods on the ground that import was incontravention of the provisions of Section 111(o) of the Customs Act consequent to violation of the condition of the notification. The appellants filed a reply to the notice stating that the licence issued to them was subject to exemption notification 260/92 -Cus dt.27.8.92 which does not prohibit availment of Modvat credit on inputs used in the manufacture of final products. They also contended that Notification 203/92 which was alleged to have been contravened by them, is not applicable to their case. A notice dt.7.9.2000 fixing personal hearing on 20.9.2000 was issued by the Office of the Commissioner. The appellants vide telegram dt.19.9.2000 requesting for adjournment. However, the impugned order was based on 20.9.2000 without granting a personal hearing.

(3.) We have heard both sides and perused the records including the copy of the reply dt.9.4.99 stated to have been sent by registered post and the telegrams seeking adjournments. In the above circumstances, the interest of justice required that the case should be adjudicated afresh by the Commissioner after considering the appellants' reply. We, therefore, set aside the impugned order and remand the case to the jurisdictional of Commissioner for fresh decision after extending a reasonable opportunity to the appellants of being heard and putting forth their defence.