PerGowri Shankar :

Appeal taken up for disposal after waiving deposit.

2. The question for consideration in this appeal is whether duty could be demanded from the appellant before us by seeking to revoke the benefit of exemption contained in Notification 203/92 which was extended on their importation. The show cause notice issued to the appellant alleges that modvat credit had been taken of the duty paid on the inputs used in the manufacture of exported goods thus contravening the condition contained in clause v (a) to Notification 203/92. The notice invoked the extended period contained in the proviso to sub-section (1) of Section 27 (sic-28) of the Act on the ground that the exporter had made a wrong declaration on the shipping bill that modvat credit has been (sic - not been) availed of.

3. Counsel for the appellant contends that the issue is covered by the ratio of the Tribunal in Plastchem Industries Vs. CCE 2000 (120) ELT 775. In that decision the Tribunal has concluded that it was open to the department, when the import took place to ask the importer to satisfy that modvat credit has not been availed of and it could deny exemption in the event compliance of this condition was not demonstrated. It however, state that once the import has taken place and the extended period is invoked the existence of factors sufficient to justify invoking the extended period specified in the proviso to sub-section (1) of Section 27 would have to be shown by the department. In the absence of any such material, it held the notice to be barred by limitation.

4. The same considerations would apply to the facts before us. The notice seeks to invoke the extended period by alleging that the exporter made a wrong declaration in the shipping bill that modvat credit has not been availed. This claim fails for want of substantiation. The notice did not enclose copies of the shipping bill in support. Nor is it possible to believe that, while extending the benefit of notification to the imported goods, the department's officers kept in mind any such declaration. The functions relating to processing of documents relating to import and export of goods takes place in different departments of the custom house and to our understanding the officers concerned with processing import documents and extending benefit of notification would not have before them any declaration that might have been filed by the exporter of the goods. The departmental representative is not able to say that this understanding is incorrect. In allowing the benefit of the notification, therefore, the department was not influenced by any statement made in shipping bills.

5. It is clear that the failure to verify compliance with the condition contained in the paragraph (v) of the notification was due to the acts or omission of the assessing officer and not due to any suppression or mis-statement or such act on the part of the importer. Further, there is also not slightest evidence that modvat credit has in fact been availed of. What the department has done, in order to make up for the acts or omissions of its officers, is to transfer to the importer the burden which now lies upon it of showing that credit has been availed of. There has not been slightest attempt to discharge this burden. We are unable to confirm the Commissioner's order.

6. The appeal is allowed and the impugned order set aside.