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2013 (7) TMI 338 - AT - Central ExciseDuty liability - Cleared excisable goods through merchant exporter - Merchant exporter, has executed B-1 bond before the adjudicating authority - Appellant had cleared the consignment to merchant exporter as per CT-1s given by them - Reason for demand of duty from appellants is, for non producing copies of ARE-1 for warehousing the goods in SEZ Held that - Once the duty liability has been debited in the bond, which was transferred to the appellant s name by the merchant exporter under permission from the concerned authority, it would amount to discharge of duty liability by the manufacturer. Non receipt of acknowledged ARE-1 from the SEZ unit will not be an issue for the manufacturer, whose goods were cleared for export. If any duty liability arises for non -delivery of the goods to SEZ, it would be on the merchant exporter as the bond which has been entered into, has been debited for clearance of such goods - Manufacturing units were not responsible for the production of proof of exports and if the goods are not exported the entire responsibility rests on the merchant exporter as per the decision in the case of Jay Jagdish Sugar 2004 (3) TMI 604 - CESTAT, MUMBAI . Also, Tribunal in the case of Shree Vithal S.S.K. Ltd. v. Collector of Central Excise reported in 1991 (12) TMI 149 - CEGAT, BOMBAY has held that in case the finally manufactured goods are not exported by the merchant exporters, the demand of duty can be raised only against the exporter and not against the manufacturer. Decided in favor of Assessee.
Issues:
1. Appeal against order confirming demand of duty, interest, and penalties. 2. Non-production of proof of export before the adjudicating authority. 3. Appellant's liability to pay Central Excise duty. 4. Discharge of duty liability by the manufacturer. 5. Duty liability for non-delivery of goods to SEZ. 6. Interpretation of legal provisions and judicial pronouncements. Analysis: 1. The appeal was filed against the order confirming the demand of duty, interest, and penalties by the first appellate authority. The appellant had cleared excisable goods through a merchant exporter to a Special Economic Zone (SEZ) but failed to produce proof of export before the adjudicating authority, leading to the issuance of a show cause notice. 2. The key issue revolved around the non-production of proof of export before the adjudicating authority by the appellant. The adjudicating authority confirmed the demand of duty, interest, and imposed penalties due to the lack of proof of export, which was contested by the appellant in the appeal. 3. The appellant argued that once goods are cleared for export to a merchant exporter, they are not liable to pay any duty on such goods. They relied on legal precedents to support their contention that duty liability for non-delivery of goods to the exporter rests on the merchant exporter, not the manufacturer. 4. The tribunal analyzed the undisputed facts, noting that the duty liability had been debited in the bond transferred to the appellant's name by the exporter. The tribunal concluded that the duty liability was discharged by the manufacturer through the bond transfer, absolving them of further duty payment obligations. 5. Regarding duty liability for non-delivery of goods to the SEZ, the tribunal held that any such liability would fall on the merchant exporter, as evidenced by the bond debited for the clearance of goods. The tribunal cited judicial pronouncements to support its interpretation of duty liability in cases of non-exported goods. 6. Based on the legal provisions and judicial pronouncements cited, the tribunal found the impugned order unsustainable and set it aside, allowing the appeal with consequential relief. The tribunal's decision was grounded in the understanding that duty liability in export scenarios is primarily on the merchant exporter, not the manufacturer, in cases of non-exported goods. This comprehensive analysis of the judgment highlights the legal intricacies and interpretations considered by the tribunal in reaching its decision.
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