2012 (5) TMI 431 - AT - Central Excise

Demand of duty - order Commissioner has confirmed the demand of duty, which was earlier granted as rebate to the appellants - Commissioner has not doubted the factum of export of goods in question, in which case the appellants would be entitled to the benefit of duty draw back - exports were made under the rebate claim Held that - appellants rebate claim to the extent of around Rs. 2.20 Crores stands denied by the authorities below in respect of admitted exports, appellants have been able to make out a prima facie good case in their favour so as to dispense with the condition of pre-deposit of duty and penalty, stay petitions allowed

Summary

Issues:
1. Confirmation of demand of duty and rejection of rebate claim.
2. Allegations of non-receipt of raw materials and procurement from other manufacturers.
3. Reliability of statements from transporters, job workers, and sellers.
4. Denial of rebate claim based on the source of procurement.
5. Entitlement to duty draw back and alternative benefits.
6. Decision on pre-deposit of duty and penalty.

Analysis:

1. The judgment confirmed the demand of duty amounting to Rs. 1,22,82,044/- and rejected a rebate claim of Rs. 2,20,91,410/- imposed penalties on the appellants. The Commissioner found discrepancies in the rebate claim for duty paid on inputs used in manufacturing Stainless Steel Utensils.

2. The appellant, engaged in exporting Stainless Steel Utensils under a rebate claim, faced allegations of not receiving raw materials at their factory and procuring utensils from manufacturers in Delhi. The Commissioner relied on statements from transporters, job workers, and sellers to support these findings.

3. The appellant's advocate argued against the reliability of the statements, pointing out inconsistencies and lack of voluntariness. He highlighted that the transporters later clarified their statements made to Central Excise authorities. The advocate also noted that key personnel from the appellant's side were not interviewed during the investigation.

4. Despite the acknowledgment of the export of Stainless Steel Utensils, the rebate claim was denied due to the alleged procurement from outside manufacturers. The appellant contended that even if some items were procured externally, the majority of their exports were of different products, justifying their entitlement to the rebate claim.

5. The judgment considered the appellant's entitlement to duty draw back and alternative benefits. It noted that the fact of export was not in question, making the appellants eligible for duty draw back. The court found that the appellants had made a prima facie good case, allowing them to dispense with the pre-deposit of duty and penalties imposed.

6. In conclusion, the court ruled in favor of the appellants, granting them relief from the pre-deposit of duty and penalties. The judgment emphasized the importance of considering the overall facts and circumstances of the case in determining the appellant's entitlement to benefits under the law.