Per Archana Wadhwa :

The appellants, M/s. Kitply Industries Ltd. imported Timber Logs in August, 1994 under Advance Licence Scheme, by availing the benefit of Notification No. 203/92-CE dated 19.5.92. The appellants had already fulfilled their Export Obligation and the entire export proceeds were realised in respect of which the Timber Logs were imported by the appellants against the Advance Licences.

2. On investigations having been started against the appellants by the Customs Authorities, it was seen that the appellants had already entered into negotiations for sale of the imported goods to different parties. It was also seen that the appellants had availed the MODVAT benefit on the goods exported against the Export Obligation of the above-mentioned Advance Licences, against which imports were made. However, during the investigations, the appellants reversed the MODVAT Credit of Duty availed on the inputs used in the manufacture of the exported goods. As the authorities also entertained a view that the appellants have sold the imported items without first redeeming the LUT, the appellants approached the D.G.F.T. who vide their letter dated 8.9.94, granted relaxation for LUT r