2007 (4) TMI 14 - AT - Central Excise

Warehousing Alleged that re-warehoused certificate duly signed by the Consignee s range supdtt. has not been received by the appellant range supdtt. within 90 days and accordingly liable to pay duty Authority after considering detail allow the appeal with consequential relief

Summary

Issues:
1. Allegation of non-receipt of re-warehoused certificate by the consignor within 90 days.
2. Duty liability on consignor under Rule 20 of Central Excise Rules.
3. Interpretation of provisions under Rule 20(4) regarding duty payment responsibility.
4. Requirement of original warehousing certificate for duty payment determination.
5. Failure of consignee's and consignor's superintendents to follow prescribed procedures.
6. Burden of proof on consignor in case of non-receipt of goods by consignee.
7. Justification of imposing duty and penalty on appellant.

Analysis:
1. The case involved an appellant engaged in manufacturing scarves who cleared goods to an EOU without duty payment. The consignee informed the jurisdictional Central Excise Superintendent about the receipt of goods, but proceedings were initiated against the consignor for non-receipt of re-warehoused certificate within 90 days.

2. Rule 20 of Central Excise Rules places duty payment responsibility on the consignee, except when goods are not received by the consignee, shifting the duty liability to the consignor. The procedure for such cases is detailed in Circular No. 579/16/2001-CX, emphasizing the importance of consignee acknowledgment for duty determination.

3. The judgment clarified that duty can only be demanded from the consignor if goods are not received by the consignee, and the consignor followed the prescribed procedure. The essence of Rule 20(4) is to ensure goods' receipt by the consignee, and consignor's liability is contingent on non-receipt.

4. The requirement of the original warehousing certificate for duty payment determination was emphasized, highlighting the procedural steps for inter-departmental correspondence between superintendents and the significance of consignee acknowledgment.

5. The failure of both consignee's and consignor's superintendents to follow the prescribed procedures, including issuing reminders and securing proof of goods receipt, was noted. The burden of proof lies on the consignor only if goods are not received by the consignee.

6. The judgment highlighted that the burden of duty cannot be imposed on the consignor if the consignee's superintendent fails to fulfill obligations, as outlined in the circular. The duty demand from the consignor without proof of non-receipt by the consignee was deemed unwarranted and unjustified.

7. Ultimately, the impugned order was set aside, and the appeal was allowed in favor of the appellant, emphasizing the importance of following prescribed procedures and ensuring proof of goods receipt before imposing duty and penalties.