2007 (4) TMI 458 - AT - Central Excise

Summary

Issues involved: Confirmation of demand of duty for non-fulfilling the export condition within six months.

The judgment by the Appellate Tribunal CESTAT, Mumbai dealt with the issue of confirming the demand of duty for non-fulfilling the export condition within a period of six months. The respondents had manufactured goods and cleared them under execution of bond for export through a merchant exporter. However, the goods were not exported within the stipulated six-month period as per the conditions laid down in Notification No. 42/2001-C.E. (N.T.), dated 26-6-2001. The department issued a show cause notice proposing the levy of duty on the manufacturer. The duty amount was confirmed along with a penalty on the manufacturer-respondent. The Commissioner (Appeals) dropped the demand and penalty, stating that the liability to export the goods should be on the merchant exporter, not the manufacturer. This decision was challenged by the department, leading to the appeal.

Upon examining Notification No. 42/2001-C.E. (N.T.), dated 26-6-2001, it was found that the manufactured goods could be exported through a merchant exporter as per the provisions of the Notification. It was established that the manufacturer should not be held responsible for the duty payment in case the merchant exporter failed to fulfill the export condition. Referring to the case of Kishore Pumps Ltd. v. Commissioner of Central Excise, Pune, 2004 (173) E.L.T. 45 (Tri. - Mumbai), it was clarified that duty cannot be demanded from the assessee manufacturer in such circumstances. Consequently, the appeal filed by the revenue was deemed to lack merit, and it was rejected by the Tribunal.