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Issues: Duty demand under Rule 20(4) of the Central Excise Rules, 2002 for goods sent under AR3A procedure from Kandla Free Trade Zone to a 100% EOU at Hisar, Haryana.
In this case, the duty demand was made under Rule 20(4) of the Central Excise Rules, 2002, concerning goods sent under the AR3A procedure from a unit in Kandla Free Trade Zone to a 100% EOU at Hisar, Haryana. The goods were not alleged to have been rewarehoused at the Hisar unit. The proprietor of the Hisar unit confirmed receiving the goods but failed to explain why they were not rewarehoused. The explanations provided indicated that the goods were diverted by the Hisar unit and eventually exported from India. The department was given time to verify these claims but failed to provide a report, leading to a request for further extension. The tribunal considered the matter and found that, at the prima facie stage, there was a good case for the unit in Kandla not to be held liable for duty. Despite the Revenue's request for more time to ascertain if the goods were exported, the tribunal ordered a complete waiver of the duty determined and the penalties imposed on the appellants. The appeal was directed to be listed in due course, and the application was allowed under Section 35F of the Central Excise Act, 1944 in the above terms. The decision was based on the lack of evidence to support duty liability on the Kandla unit, given the circumstances surrounding the diversion and export of the goods from the Hisar unit.
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