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2013 (11) TMI 540 - AT - Central Excise100% EOU - Clearance of goods from Domestic Tariff Area Authorization not taken or even applied differential duty of SAD demanded with Penalty u/s 11AB of the Central excise Act 1944 - Held that - Prima facie, the clearances in April 2009, while applied for authorization (for clearance of goods in the DTA) on 29.04.2009 and authorization was granted on 1.5.2009 is clearly irregular - The petitioner was entitled to clear goods for sale to the DTA, though prospectively - Thus relief granted to the extent of penalty of an equivalent amount as the duty component, imposed u/s 11AC of the Central Excise Act, 1944, on condition that the petitioner remits to the credit of Revenue the amount of differential SAD of Customs assessed by the adjudicating authority plus interest Decided partly in favour of assessee.
Issues:
1. Clearance of goods in the Domestic Tariff Area without authorization. 2. Differential duty of SAD of Customs imposed. 3. Appeal against the adjudication order. Issue 1: Clearance of goods in the Domestic Tariff Area without authorization The judgment addresses the case where the petitioner, a 100% Export Oriented Unit, cleared goods for sale in the Domestic Tariff Area (DTA) without proper authorization. The petitioner had applied for authorization but made clearances before the authorization was granted, which was deemed irregular. The Tribunal found that the clearances in April 2009 were not in compliance with the authorization process, as the authorization was granted on 1.5.2009. The Tribunal noted the irregularity in the clearances made by the petitioner/appellant. Issue 2: Differential duty of SAD of Customs imposed The Tribunal observed that a differential duty of SAD of Customs amounting to Rs.3,05,773/- was ordered to be recovered from the petitioner due to the irregular clearances in the Domestic Tariff Area. The duty was imposed under Section 11AB of the Central Excise Act, 1944. Despite the irregularities, the Tribunal considered granting relief to the petitioner by imposing a penalty equivalent to the duty component under Section 11AC of the Act. The Tribunal directed the petitioner to remit the amount of differential SAD of Customs assessed by the adjudicating authority, along with interest, within a specified timeframe to avoid dismissal of the appeal. Issue 3: Appeal against the adjudication order The petitioner had appealed the adjudication order that imposed the differential duty of SAD of Customs. The Tribunal, while acknowledging the irregularities in the petitioner's actions, decided to grant relief by allowing the petitioner to pay a penalty equivalent to the duty component. The Tribunal waived the pre-deposit requirement and stayed the recovery proceedings subject to the condition that the petitioner remits the specified amount within eight weeks. Failure to comply would result in the dismissal of the appeal. The Tribunal ensured that the petitioner was duly informed of the obligations under the order. This judgment highlights the importance of complying with authorization requirements for clearing goods in designated areas and emphasizes the consequences of non-compliance, including the imposition of differential duties and penalties under relevant legal provisions.
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