Commissioner Of Customs (Export) ... vs M/S. Deluxe Sales Corporation

(Arising out of Order-in-Original No. 95/03/CAC/CC/SK dt. 27.11.2003 passed by the Commissioner of Customs, Mumbai )

For approval and signature: Honble Mr. P.S.Pruthi, Member (Technical)

Honble Mr. Ramesh Nair, Member (Judicial)

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1. Whether Press Reporters may be allowed to see : No the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?

2. Whether it should be released under Rule 27 of the : No CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?

3. Whether Their Lordships wish to see the fair copy : Seen of the Order?

4. Whether Order is to be circulated to the Departmental : Yes authorities?

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Commissioner of Customs (Export) Mumbai :

Appellant

VS

M/s. Deluxe Sales Corporation :

Respondent

Appearance

Shri Ahibaran, Addl. Commr. (A.R.) for Appellant

None for respondent

CORAM:

Mr. P.S.Pruthi, Member (Technical) Mr. Ramesh Nair, Member (Judicial)

Date of hearing : 04/09/2015 Date of decision: 04/09/2015

ORDER NO.

Per : P.S. Pruthi

Revenue is in appeal against the impugned order-in-original.

2. In these cases show cause notice was issued to transferees of Advance licenses who had purchased them from the local market. The reason for issuing show cause notice was that the transferees have not discharged the burden of proving that modvat credit has not been availed in terms of condition under Notification No. 203/92-Cus dt. 19.05.1992. The adjudicating authority held that the burden cannot be passed on to the transferee of the licence once the license has been endorsed as transferable by the licensing authority.

3. Ld. AR appearing on behalf of the Revenue states that according to the grounds of appeal the adjudicating authority should have issued a notice to their license holders to verify whether the modvat credit was availed by the license holders. He has also placed on record a recent judgment of the Honble Apex Court in the case of Tata Iron and Steel Co. Ltd. Vs. Commissioner of Customs, Mumbai 2015 (319) E.L.T.546 (S.C.) in which their Lordships held that if the original license holder, deliberately suppressed the fact of having availed modvat credit, the extended period of limitation for demand in terms of proviso to Section 28 would be available to Revenue even against the transferee of the license.

4. Considered the submissions. We find that in this case the facts are not very clear. It is not forthcoming from the records whether any verification was done regarding availment of modvat credit by the original license holder. The impugned Order also does not throw any light on this aspect. Keeping in mind, the Apex Court judgement in the case of Tara Iron and Steel Co. Ltd. (supra), we find it appropriate to remand the case to the adjudicating authority for appropriate decision after giving an opportunity of hearing to the respondents. It may be kept in mind by the adjudicating authority that, in view of the Apex Court judgement (supra), in case he finds that the proof of availment of modvat credit is not available the demands will not sustain in the light of various judicial pronouncement.

5. Appeal allowed by way of remand. Since the matter is more than 14 years old it would be the interest of justice that the matter is decided expeditiously. We direct the adjudicating authority to pass an order within three months from the date of receipt of this order.

(Dictated in court )

(Ramesh Nair) Member (Judicial)

(P.S.Pruthi) Member (Technical)

SM.

3 Appeal No. C/1214/2004-Mum