COMMISSIONER OF CUSTOMS Vs. VISHAL EXPORTS OVERSEAS LTD.

JUDGEMENT

(1.) The respondents had exported Shrimps under 159 Shipping Bills under the Duty Exemption Pass Book (DEPB) Scheme during the period August 1996 to March, 1997. In assessing the Shipping Bills, the department allowed DEPB credit to the exporter in respect of input "Vitamin Mix" in terms of Notification No. 104/95 -Cus. dated 30.5.95 (as amended) to the extent of US 8.2 per kg. only against their claim of credit in the range of US 12.5 to 14.75 per kg. The respondents M/s. Vishal Exports Overseas Ltd. (VISHAL, for short) disputed the unit price of US 8.2 per kg. fixed as DEPB credit by the department and they requested for fixing the credit at US 36 per kg. as allowed to M/s. Adani Exports Ltd., M/s. Inter Continental India and others. The department took the view that VISHAL'S case was not analogous to that of M/s. Adani Exports Ltd. (ADANI, for short) and others. In keeping with this view, the original authority, by Order -in -Original dated 31.12.98, affirmed the unit value credit of US 8.2 per kg. already fixed for Vitamin Mix, after rejecting VISHAL'S claim for fixing it at US 36 per kg. Aggrieved by the decision of the Assistant Commissioner of Customs, VISHAL preferred an appeal to the Commissioner (Appeals) and also filed a Writ Petition in the High Court of Madras. The Hon'ble High Court, by its judgment dated 24.3.99, allowed DEPB credit of US 36 per kg. (as allowed by the department to others) provisionally subject to certain conditions. The operative part of the judgment reads as under: 5. There is no dispute that the other exporters are being given the credit facility at the rate of US 36 per kg. pursuant to the orders of the appellate authority mentioned in the prayer in the writ petition itself. Hence, I am of the view that the petitioner cannot be deprived of such benefit during the pendency of the appeal. However, to safeguard the interests of the respondents, the petitioner may be directed to furnish the bank guarantee. Since the appeal is pending, the petitioner is directed to furnish the bank guarantee for the entire difference of the rate of credit facility to the satisfaction of the first respondent herein and avail the credit facility and utilisation pending disposal of the appeal. It is made clear that this is subject to the result of the appeal preferred by the petitioner before the appellate authority."

(2.) In terms of the High Court's judgment, the department recommended credit of US 36 per kg. to the Joint Director -General of Foreign Trade (JDGFT) for granting it in VISHAL'S Pass Book. Such recommendation was made by reckoning the quantity of input (Vitamin Mix) at 227 per kg. for one M.T. of the export product (Shrimps). Later on, the Commissioner (Appeals) disposed of VISHAL's appeal as per order dated 29.6.2000 remanding the case to the original authority for de novo adjudication, after holding thus "The case of M/s. Adani Exports Ltd., where right from the beginning, the exporter had declared the input price as US 36 per kg. therefore stands distinguished from the case of the appellant who had claimed credit for Vitamin Mix only at US 12 to 15 per kg." This remission of the case to the original authority was on the following basis: "Firstly, that the lower authority had passed the orders violating the principles of natural justice as they were neither given a Show -cause notice nor allowed to be personally heard before the final decision was taken. On scrutiny of the records, it is seen that it is a fact that while denying the claim for the higher credit of US 36 per kg., the lower authority has, in fact, not issued any Show -cause notice giving the appellants an opportunity to substantiate their claim nor granted a personal hearing, as required by the principles of natural justice. Secondly, the appellant, in the course of his appeal, has also submitted that a letter had been given by them dated 27.5.97 giving inter -alia a list of international prices of Vitamin mixes (including at US 40 per kg) but the lower authority had not referred to this letter while deciding the case and denying the higher credit. I have gone through the original case records and find that a letter dated 26.5.97 has, in fact, been received on record. Curiously, however, this letter, which is handwritten in ink, appears to be in two different handwritings and the reference to the average price of US 40 per kg. for vitamins seems to be an addition to the original letter. The photocopy of different sources including Chemical Weekly for international prices said to have been enclosed to the letter, is also not on record. In the fitness of things, this reference deserves to be discussed and ought to have been discussed and suitably disposed of by the lower authority before finalising the credit eligibility." Pursuant to the above remand order, the Assistant Commissioner re -examined the case and passed order dated 18.10.2002 fixing the rate of DEPB credit for VISHAL at US 8.2 per kg. of Vitamin Mix and directed them to discharge consequential duty liability. VISHAL again approached the Commissioner (Appeals) in an appeal against the Assistant Commissioner's decision and this appeal was allowed by allowing credit at the rate of US 36 per kg. to VISHAL as in ADANI'S case. Hence, the present appeal of the Revenue.

(3.) Heard both sides. Ld. DR reiterated the grounds of the appeal and emphatically submitted that the Tribunal's decision in ADANI'S case was based on definite evidence adduced by that party and the same was not applicable to the instant case wherein VISHAL could not substantiate their claim for DEPB credit at the rate of US 36 per kg. In this connection, Ld. DR relied on the Hon'ble Supreme Court's judgment in Civil Appeal No. 4123/1983 of M/s Karnataka Chemical Industries and Ors. wherein the case of a particular assessee which involved challenge to levy of additional duty of customs on "brass scrap" was delinked from the rest of the cases which involved challenge to levy of such duty on "copper scrap." Ld. DR argued that VISHAL'S case was different from ADANI'S case just as a case involving "brass scrap" was different from one involving "copper scrap." Ld. DR also laid stress on the ground raised by the appellant with reference to the amendment made to Notification No. 104/95 -Cus by Notification No. 24/97 -Cus dated 6.3.97. It was argued that, as the party had not adduced any evidence in terms of sub -clause (b) (I to IV) of clause (iii) of the second proviso to condition No. 2 of Notification No. 104/95 -Cus., as amended by Notification No. 24/97 -Cus., it was incumbent on the department to determine unit price for DEPB credit in terms of sub -clause(b) (V) of the said clause (iii) whereunder the Assistant Commissioner of Customs could arrive at such price by following such reasonable method as he might deem fit. It was this residual provision which was appropriately invoked by the original authority for passing Order -in -Original dated 18.10.2002, DR argued.