ORDER
T.K. Jayaraman, Member (T)
1. Revenue has filed this appeal against the OIA No. 11/2005 dated 18.03.2005 passed by the Commissioner of Customs and Central Excise (Appeals), Visakhapatnam.
2. The respondents applied to DGFT for an EPCG Licence. Goods were shipped on 03.01.2000. The DGFT issued the Licence dated 09.05.2000 with an endorsement at Clause 11 to the effect that the licence shall be valid for the goods already shipped/arrived provided Customs duty has not been paid and the goods have not been cleared from Customs. Subsequently, the respondents filed ex-Bond Bill of Entry dated 17.05.2000 for release of the goods on payment of concessional duty vide Notification No. 49/2000-Cus dated 27.4.2000. Revenue proceeded against the respondents proposing demand of differential duty on the ground that the concessional rate came into existence only on 01.04.2000 and in the instant case, the goods were shipped prior to that date. The respondents approached the Commissioner (Appeals) who allowed the appeal of the respondent and passed the impugned order.
3. Revenue is aggrieved over the impugned order on the following grounds:
(i) The Commissioner (A) erred in not going through the specific instructions issued by the Ministry in F.No. 607/24/2000-Dbk dt 3.5.2000. The appellants M/s. Neelachal Ispat Nigam Ltd., imported and bonded the goods on 4.2.2000 and subsequently cleared the goods on 17.5.2000 under Notfn. No. 49/2000-Cus dt. 27.4.2000 against the EPCG licence issued on 9.5.2000
(ii) The Ministry vide order F.No. 607/24/2000-Dbk dt. 3.5.2000 clarified that the Customs Notification No. 49/2000-Cus dt. 27.4.2000 has been issued under 5% duty. However, the 5% duty benefit can’t be extended to goods shipped prior to 31.3.2000 because the 5% duty under EPCG Scheme came into operation w.e.f. 1.4.2000. Hence the licence issued under 5% duty under EPCG Scheme can’t cover such goods. Further, 5% EPCG Scheme would also not available to Bills of Entry for Home Consumption, which were presented prior to 27.4.2000.
(iii) It is clear from the above specific instructions of Ministry that the appellants are not eligible for concessional rate of duty and accordingly the orders of the adjudicating authority are in order.
4. Shri K.S. Bhatt, the learned SDR reiterated the grounds of appeal of the Revenue.
5. Shri S.K. Mohanty, the learned Advocate, who appeared for the respondent made the following submissions:
(i) The ground raised by the Revenue has already been dealt with by the learned Commissioner (Appeals) in para 9 and 10 of the impugned order. The Commissioner (Appeals) held that the inference of the Board’s communication is misplaced since para 4.15(C) of the Hand Book of Procedure read with the EXIM Policy merely specifies the validity of an EPCG licence with reference to the date of shipment. Though the licence is issued on 09.05.2000, the validity is reckoned from 03.01.2000 which is the date of shipment from the originating country. DGFT, who issued the licence with validity from 03.01.2000 is the final authority.
(ii) It is well settled principle of law that the validity of licence issued by the DGFT cannot be questioned by the customs authorities. The following decisions were relied on by the learned Counsel.
(a) Lokesh Chemical Works v. M.S. Mehta, CC(Preventive), Bombay
(b) Indu-Nissan Oxo Chemicals Pvt. Ltd. v. CC, Kandla
(c) CC v. Oswal Agro Mills Ltd.
(d) Richardson Hindustan Ltd. v. UOI
(e) Straw Products Ltd. v. CC, Mumbai-I
(f) Avon Appliances v. CC, Mumbai-II
(g) Kobian ECS India Pvt. Ltd. v. CC, Mumbai
(h) Pradip Polyfils Pvt. Ltd. v. UOI 2004 (173) ELT 3 (Bom.)
(iii) The Ministry’s instruction dated 03.05.2000 is not binding on quasi-judicial authority like Commissioner (Appeals) as held in the following decisions:
(a) Orient Paper Mills Ltd. v. UOI 1978 (2) ELT J 345(SC)
(b)Genest Engineers Pvt. Ltd. v. UOI
(c)Tirupati Woollen Mills Ltd. v. UOI
6. We have gone through the records of the case carefully. The EPCG Licence dated 09.05.2000 carries an endorsement at Clause 11 as –
The Licence shall be valid for the goods already shipped/arrived provided customs duty has not been paid and the goods have not been cleared from Customs.
In terms of the above endorsement, the licence is valid for the goods shipped on 03.01.2000. Since on the date of clearance of the goods, the Notification prevailing is 49/2000-Cus dated 27.04.2000, the correct rate of duty applicable is only 5% as rightly held by the Commissioner (Appeals) in para 10.1 of the impugned order. The Commissioner (Appeals) has clearly dealt with the untenability of the inference in Board’s communication relied on by the Revenue in the grounds of appeal in the light of paragraph 4.15(C) of the Hand Book of Procedures, Vol.I. He has also rightly held that in matters of licence issued under the EXIM Policy, DGFT will have the last word. As quasi-judicial authority, the Commissioner (Appeals) is not bound by the interdepartmental communication, which in any case, has not clarified the correct legal position. In view of the above observations, the Revenue’s appeal has no merits. Therefore, we uphold the impugned order and dismiss the Revenue’s appeal.
(Operative portion of this Order was pronounced in open court on conclusion of hearing)