2003 (3) TMI 586 - AT - Central Excise

Summary

Issues:
1. Duty and penalty imposed on textile exporters for damaged goods meant for export.
2. Appeals filed against duty and penalty orders.
3. Waiver of pre-deposit of duties and penalties requested by appellants.
4. Allegation of actions without prior permission from departmental officers.

Analysis:
The case involved exporters of textile made-ups and converter units who received textile fabrics without duty payment for conversion into export goods. Due to flooding, some exported goods got damaged, leading to duty recovery demands and penalties imposed by the Commissioner in four adjudication orders. The appellants challenged these orders, seeking waiver of pre-deposit of duties and penalties.

The appellants' representative presented documents showing the damaged goods' sale process, including intimation to authorities, salvage plans, and duty payment intentions. The sale process was transparent, involving inspections by surveyors and insurance companies, failed reconditioning attempts, and open tenders for damaged goods' sale. The appellants emphasized the fair valuation and transparency of the damaged goods' sale.

The Respondent argued that bonded goods could be sold in the domestic market with proper authorization, justifying the Commissioner's decisions on duty demands. The appellants raised the issue of limitation, claiming the department was aware of the damage and sale intentions, making the demands time-barred. The appellants argued that the damaged goods' sale value matched the transaction value, avoiding any short levy.

The Tribunal noted the limitation plea, acknowledging the department's knowledge of the damage and sale plans. They found merit in the argument that the damaged goods' sale value equated to the transaction value, negating short levies. The Tribunal also considered job-workers' limited liability under bonds, stating no further duty or penalty burden should rest on them.

Regarding actions without prior permission, the Tribunal observed a lack of communication with departmental officers during subsequent proceedings, emphasizing the need for adherence to concession terms. They questioned whether failure to seek clearance warranted original duty payment, considering the damaged goods' circumstances. The Tribunal granted the appellants' request for pre-deposit waiver, acknowledging the prima facie case in their favor.