2006 (1) TMI 417 - AT - Central Excise

Export - Re-importation for reprocessing and re-export thereof - Demand - Evidence of removal

Summary

Issues:
1. Discrepancy in re-imported and re-exported goods.
2. Allegations of clandestine removal.
3. Interpretation of Notification No. 158/95.
4. Validity of penalty imposed.

Analysis:
1. The case involved a dispute regarding the re-import and re-export of goods by a manufacturer. The Revenue alleged that the goods re-exported were not the same as the re-imported ones, based on discrepancies in the entries made in the factory registers and labels found on the drums. The Deputy Commissioner concluded that the goods re-exported were different from the re-imported ones, leading to a duty demand on the manufacturer.

2. The original authority imposed penalties on the manufacturer for contravention of Central Excise Rules by not discharging duty on the re-imported goods. However, the Commissioner (Appeals) overturned this decision, citing lack of evidence for clandestine removal and improper adjustment of rejected goods. The Tribunal upheld this decision, emphasizing the absence of concrete proof against the manufacturer.

3. The Revenue relied on Notification No. 158/95 to argue that the re-exported goods did not comply with the conditions specified. They contended that the goods could not have reached the manufacturer's premises on the same day as clearance by Customs, and the labels indicating a re-test date in October 2001 raised suspicions of non-compliance with the notification. The manufacturer explained the discrepancies as errors made by the security staff in the registers.

4. The manufacturer defended against the penalties by asserting that the process of reprocessing the goods was simple and quick, involving only moisture removal and blending. They argued that the entries in non-statutory registers were made erroneously and that all official documents were in order. The Tribunal agreed with the manufacturer, stating that the Revenue failed to prove any wrongdoing and dismissed the appeal, highlighting the lack of substantial evidence for clandestine removal.