2006 (9) TMI 430 - AT - Central Excise

Summary

Issues involved: Demand of duty for not exporting goods within stipulated time u/s 11A of the Central Excise Act, 1944.

Issue 1: Demand of duty for not exporting goods within stipulated time

The appeal concerned the demand of duty for not exporting goods cleared under ARE-1 within the stipulated time of six months and even within the extended period. The exporter, M/s. Rahul Computex Pvt. Ltd., cleared goods without payment of duty but failed to export them within the required timeframe, leading to a dispute with the Revenue. The Commissioner (Appeals) set aside the demand, interest, and penalty imposed by the Adjudicating Authority, citing procedural lapses and revenue neutrality. The exporter's contentions included unforeseen client actions affecting export formalities and subsequent compliance under the supervision of Chennai Customs authority. The Commissioner (Appeals) relied on precedent to rule in favor of the exporter, prompting the Revenue to appeal the decision.

Issue 2: Validity of bond and conditions for export

The Department argued that the exporters failed to meet the conditions of Rule 19(3) of the Central Excise Rules, 2002, regarding the execution of a bond and timely export of goods cleared under ARE-1. The absence of a valid bond at the time of export and the failure to export within the extended period were highlighted as key points. The Department contended that the Commissioner (Appeals) exceeded his jurisdiction by waiving statutory provisions. In response, the Respondent's advocate emphasized that non-production of ARE-1 should not be fatal, citing relevant case law. The advocate argued that the conditions for export within six months were not rigid and that the Maritime Commissioner had discretionary power to extend the time limit, referencing legal precedents and principles established by the Hon'ble High Court of Kolkata.

Separate Judgement:

The Appellate Tribunal upheld the decision of the Commissioner (Appeals), dismissing the Revenue's appeal. The Tribunal concluded that the demand was not sustainable, as the B-l bond could not be used to recover duty on goods exported after the stipulated six-month period. The Tribunal affirmed that the impugned order was not erroneous, as the demand was deemed unsustainable under Rule 19 of the Central Excise Rules. Consequently, the appeal filed by the Revenue was dismissed, affirming the ruling in favor of the exporter, M/s. Rahul Computex Pvt. Ltd.