2006 (9) TMI 429 - AT - Central Excise

Summary

Issues: Export clearance procedure, Applicability of exemption, Imposition of duty and penalties, Limitation period for demand.

Export Clearance Procedure: The case involved an applicant engaged in manufacturing stainless steel utensils and availing SSI exemption, exporting products through a sister concern and merchant-exporters. The issue arose when the exports were not directly from the manufacturing unit but from the premises of the merchant-exporter/sister concern. A show cause notice was issued, alleging such sales to be domestic, crossing the exemption limit, leading to a demand for duty and penalties.

Applicability of Exemption: The Board's circular clarified that the simplified export procedure was available only for units undertaking exports themselves or through merchant-exporters directly from the units. The applicant's exports were not directly from the units, leading to the demand for duty and penalties. The applicant argued that the circular was not in existence for a period, and the extended period for demand was not valid due to no suppression of facts.

Imposition of Duty and Penalties: The Commissioner confirmed the duty demand and imposed penalties under Section 11AC and Central Excise Rules on the applicant and the director of the company. The applicant contended that the exports were in line with the simplified procedure prescribed by the Board and that the demand for duty beyond a certain period was time-barred.

Limitation Period for Demand: The applicant argued that the extended period for demand could not be invoked as there was no suppression of facts from their end. The Department maintained that the statements and summons were part of an ongoing enquiry, justifying the invocation of the extended period. The Tribunal found that the applicants failed to establish a prima facie case in their favor on merits and limitation, directing them to deposit a specific sum towards duty within a stipulated period to avoid pre-deposit of the balance duty and penalties. Failure to comply would result in dismissal of appeals without further notice.