2009 (10) TMI 790 - AT - Central Excise

Summary

Issues involved: Demand of duty for non-submission of re-warehousing certificates within the stipulated time period and imposition of penalty under Rule 27 of Central Excise Rules, 2002.

Summary:

Demand of duty for non-submission of re-warehousing certificates:
The appellants, engaged in manufacturing excisable goods, cleared goods duty-free under ARE-3 certificates but failed to submit re-warehousing certificates for 2 ARE-3s cleared to a 100% E.O.U. This led to a Show Cause Notice for duty recovery and penalty imposition. The adjudicating authority accepted the re-warehousing certificates produced during proceedings and dropped the duty demand but imposed a penalty under Rule 27. The Commissioner (Appeals) later reduced the penalty.

Imposition of penalty under Rule 27:
The Counsel argued that acceptance of re-warehousing certificates should preclude any penalty, citing Rule 20 of Central Excise Rules, 2002. The JDR contended that the failure to submit certificates within 90 days as per Rule 20 justified the penalty. Upon review, the Tribunal found that the issue revolved around the demand of duty due to non-submission of re-warehousing certificates in time. The adjudicating authority had accepted the certificates, leading to the conclusion that no breach of Rule 20 occurred. Therefore, the Tribunal set aside the penalty upheld by the lower authorities, deeming it unsustainable.

In conclusion, the Tribunal allowed the appeal, emphasizing that the penalty under Rule 27 was unwarranted given the acceptance of re-warehousing certificates, and provided for consequential relief if applicable.