2005 (5) TMI 604 - AT - Central Excise

Exemption - Export to Nepal - Proof - Appeal to Appellate Tribunal - Reference to Third Member

Summary

Issues Involved:
1. Non-production of quadruplicate and duplicate copies of the invoice.
2. Compliance with the conditions laid down under Notification No. 51/94-C.E. (N.T.), dated 22-9-1994.
3. Satisfaction of proof of export under Rule 14A of the Central Excise Rules, 1944.
4. Validity of duty demand and penalty imposed by the authorities.

Issue-wise Detailed Analysis:

1. Non-production of quadruplicate and duplicate copies of the invoice:
The appellants failed to produce the quadruplicate copy of the invoice within the prescribed limit of three months and the duplicate copy of the invoice duly endorsed by the officers of Nepal Customs was also not received by the Range Officer. The authorities below confirmed the duty demand and imposed a penalty due to this non-compliance.

2. Compliance with the conditions laid down under Notification No. 51/94-C.E. (N.T.), dated 22-9-1994:
The appellants argued that they had complied with the substantive conditions of the notification, including the execution of a B-1 bond and providing proof of export through various documents such as the certificate from Nepal Customs, transporter's certificates, and bank certificates. However, the authorities insisted on the production of the quadruplicate and duplicate copies of the invoice as per the notification's procedural requirements.

3. Satisfaction of proof of export under Rule 14A of the Central Excise Rules, 1944:
The appellants contended that under proviso (3) to Rule 14A, the demands are not sustainable if the exporter has accounted for the goods to the satisfaction of the Collector. They submitted that they had provided sufficient proof of export and receipt of payment in convertible currency, which should satisfy the Collector. The authorities, however, held that the production of the quadruplicate copy of the invoice was a substantive provision, and failure to produce it justified the duty demand and penalty.

4. Validity of duty demand and penalty imposed by the authorities:
The Tribunal examined whether the appellants had provided sufficient proof of export in compliance with the notification and Rule 14A. The majority opinion, led by Member (J), found that the appellants had indeed provided adequate proof of export through various documents, and the non-production of the quadruplicate copy was not their fault as it was not issued or received by them. The Tribunal held that the demand under Rule 14A was not sustainable as the appellants had otherwise accounted for the goods to the satisfaction of the Collector. Consequently, the impugned order was set aside, and the appeal was allowed.

Separate Judgments:
- Member (J): Concluded that the appellants had produced sufficient proof of export and the demand under Rule 14A was not sustainable. The appeal was allowed, and the impugned order was set aside.
- Member (T): Disagreed, holding that the appellants failed to comply with the notification's conditions and the demand and penalty were justified. The appeal was dismissed.
- Third Member (J): Agreed with Member (J), emphasizing that the appellants had complied with the substantive conditions and provided adequate proof of export. The appeal was allowed, and the impugned order was set aside.

Final Decision:
The majority decision set aside the impugned order and allowed the appeal, directing the Registry to take steps for pronouncement of the majority decision.