2015 (9) TMI 622 - AT - Central Excise

Export of goods against ARE-1 and bond - evidence - discrepancy in the description and classification of the goods - inter company movement of goods for Job work shown as sale and purchase - paper transactions - Held that - Invoices which form the basis for demanding duty are issued by NSSL and these invoices are in the name of JNL. However, these invoices very clearly indicate the consignee as USCO Spa, Italy. Thus it is very clear that the goods covered by the invoices are being exported and sent to Italy though the payment of the same will be received from JNL. JNL, in turn, has produced the copy of the invoices which they have raised to USCO Spa, Italy and these invoices indicate the prices in Dollar. We find that the specification and number of different cylinder heads given in both the invoices are exactly the same. Even the number of cylinder head of each type is exactly the same. We have also seen the corresponding bill of lading and the packing list. There also, the number is the same. - The invoices are also attested and the officers have also certified the description, net weight, value etc. In view of this position, we do not find any discrepancy between ARE-1 and the invoices. The only discrepancy is the heading number written in ARE-1 is 7325.10 and that in the invoice of NSSL as 87. This can be an inadvertent mistake. All the documents indicate that the goods have been exported. Under the facts and circumstances, we are convinced that the goods on which duty is being demanded are the same goods which were exported under various ARE-1s for which the bonds were executed by JNL and later on, the said undertaking/bonds have been released. Under the circumstances, we hold that the demand of duty will not survive. - Decided in favour of assessee.

Summary

Issues:
1. Classification and description of goods for duty payment.
2. Discrepancy between invoices of different companies.
3. Export of goods under bond and duty payment.
4. Allegations of suppression of facts and penalty imposition.

Analysis:
1. The dispute revolved around the classification and description of goods for duty payment during the period of December 2002 to December 2004. The appellant argued that there was only one set of goods produced and exported under bond, hence no duty was payable. The Revenue contended that two sets of goods were manufactured, leading to duty evasion.

2. The invoices of NSSL and JNL indicated discrepancies in the description and classification of goods. NSSL was accused of selling cylinder heads to JNL without paying duty, while JNL exported the same goods to USCO Spa, Italy. The appellant claimed the discrepancies were inadvertent and that the goods were solely for export.

3. The tribunal examined the documents, including invoices, packing lists, and bill of lading. It found that the goods covered by the invoices were indeed exported to Italy, as evidenced by consistent specifications and numbers across all documents. The goods were cleared under ARE-1, examined by Central Excise officers, and exported through Customs, leading to the cancellation of bonds by the department.

4. The Revenue argued for penalty imposition due to suppression of facts and applicability of the extended period of limitation. However, the tribunal concluded that there was no evidence of two sets of goods being manufactured, and the duty demand was not justified. Consequently, the tribunal allowed both appeals, setting aside the duty demands on the grounds of the goods being exported under bond and no discrepancy found between the documents.

This detailed analysis of the legal judgment highlights the key issues, arguments presented by both parties, and the tribunal's decision based on the examination of relevant documents and evidence.