GLAXO INDIA LIMITED Vs. COMMISSIONER OF CUSTOMS

JUDGEMENT

(1.) FOR reasons recorded below, we waive the pre -deposit of duty amount of Rs. 33,26,515/ - and equal amount of penalty and proceed to dispose of the appeal itself with the consent of both sides.

(2.) THE facts of the case are that the appellants herein obtained Value Based Advance Licence dated 11.3.1994 for the import of raw materials required for the manufacturer of export products. They imported materials under different Bills of Entry and claimed exemption under Notification No. 203/92 Cus dated 19.5.1992 from payment of Customs duty and additional duty. It appeared to the Department that the Condition No. (v) (a) of the Notification which prohibits availment of the modvat credit on inputs had been violated by the appellants and hence show cause notice was issued to them. In their reply they pleaded that their supporting manufacturer Apte Amalgations Ltd. had already reversed the credit obtained by them under Rule 57A of the Central Excise Rules in terms of the Amnesty Scheme announced by the Central Government under Circular No. 285/1/97 -CX issued by the Central Board of Excise and Customs. The appellants produced the certificate regarding reversal of modvat caredit. However, the Adjudicating Authority has held that the supporting manufacturer was required to reverse a sum of Rs. 1,76,543 as per the formula set out in the Board's circular dated 10.1.1997 but they have only reversed an amount of Rs. 1,12,760/ -. He also held that the entire amount of interest payable was not paid and hence held that the appellants were not covered by the Amnesty Scheme and, therefore proceeded to hold that the benefit of duty free clearance under Notification No. 203/92 was not available. He, therefore, confirmed the duty and also imposed penalty as mentioned above.

(3.) IT is the contention of the appellants that the actual credit taken by the supporting manufacturer and reversed by them was only Rs. 1,12,760/ -. It is this amount together with the entire interest payable there under that was already reversed and paid by the supporting manufacturer as seen from the certificate dated 9.11.98. The appellants submit that reversal of actual credit taken is permissible in terms of Trade Notice No. 9/97 dated 29.1.1997 and that the Commissioner has failed to appreciate that reversal of the actual credit was also permissible under the law.