The Kolkata bench of the Customs, Excise and Service Tax Appellate Tribunal (CESTAT) held that a new condition that does not form part of the exemption notification cannot be introduced through a Circular.
The Bank of Nova Scotia, the appellant assessee was a ‘Nominated Agency’ under the Foreign Policy and as per the scheme introduced by the Government of India – ‘Export against supply by Nominated Agency’, the assessee imported gold/silver/platinum without payment of customs duty and supplied the same to various exporters for the manufacture of jewelry and subsequent export.
The assessee appealed against the order passed by the adjudicating authority for confirming the demand of Customs duty of Rs.13,53,67,882/- and Rs.2,44,32,057/-respectively was confirmed along with interest.
Gopal Mundhra, Rishi Raju, and Suvranil Saha, the counsels for the assessee contended that there was no condition in Notification 57/2000 that the Nominated Agency should obtain from the exporters within the prescribed period, for availing the benefit of the exemption notification and such condition was prescribed only in the Circular 28/2009.
Also submitted that it was a settled position in law that a new condition which does not form part of the Notification cannot be introduced through a Circular.
Faiz Ahmed, the counsel for the department contended that the nominated Agency should produce the Bank Realisation Certificate (BRC)from the exporters within the prescribed period to avail the benefit of the exemption notification 57/2000 and if the Nominated Agency fails to submit the BRC as prescribed in the Circular 28/2009, then the customs duties foregone on the goods supplied can be demanded from the Nominated Agency.
The Bench observed that the non-realization of sale proceeds will result in demand for Customs duty foregone from the nominated agency.
The two-member bench comprising Muralidhar (Judicial) and Anpazhakan (Technical) held that a new condition that does not form part of the Notification cannot be introduced through a Circular and the demand of duty was against the conditions of the notification.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates
