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2015 (12) TMI 1350 - AT - Central ExciseExport of goods without payment of duty - procedure not followed - demand was raised for non-furnishing of export documents - Eligibility of the benefit of exemption Notification No 125/84-CE dtd 25.5.1994 - Held that - Appellants cleared the goods under the cover of ARE-1s without payment of duty under Rule 19 of the Central Excise Rules 2002. The appellant failed to furnish the proof of export. The goods were cleared in 2003. The appellant had not furnished any corroborative evidence to establish the export of the goods till date. Hence, the demand of duty is justified. - demand was raised for non-furnishing of export documents. The goods were cleared for export without payment of duty under 19 of the said Rules. As per the provisions of law, if the appellant fails to furnish the export documents they are liable to pay duty. There is no ingredient available on record to invoke Section 11AC in this case. So, the imposition of penalty under Section 11AC is not warranted. At this stage, the Learned Authorised Representative submits that the penalty was imposed under Rule 25(1) of the Central Excise Rule 2002. The appellant cleared the goods under the Bond without payment of duty and therefore, the appellants has to be pay the duty for failure to furnish the export documents. It is not a fit case for imposition of penalty under Rule 25(1). Sub Rule (2) of Rule 25 provides that notwithstanding the provisions of Section 11AC of the Act, if any manufacturer removes excisable goods in contravention of the Rule are liable to pay penalty under the said Rules. In this case, the appellant cleared the goods for export and there is no allegation of clandestine removal of the goods as stated above. Hence, the imposition of penalty is not justified. - demand of duty alongwith interest is upheld. Penalties imposed on the appellant firm and the appellant No 2 are set aside - Decided partly in favour of assessee.
Issues:
1. Failure to produce proof of export for two ARE-1s. 2. Denial of exemption benefit under Notification No. 125/84-CE. 3. Imposition of penalties on the appellant firm and partner. Issue 1: Failure to produce proof of export for two ARE-1s: The appellant, a 100% EOU, exported goods under six ARE-1s but failed to provide proof of export for two ARE-1s. The Adjudicating Authority confirmed a duty demand of Rs. 7,96,027 under the two ARE-1s and imposed penalties. The appellant argued that the goods were not exported for the two ARE-1s and requested seized documents to establish cancellation. However, the Tribunal found no evidence of cancellation or export, upholding the duty demand and penalties. Issue 2: Denial of exemption benefit under Notification No. 125/84-CE: The appellant claimed exemption under Notification No. 125/84-CE, stating that goods were not allowed to be sold in India. However, the Tribunal noted that the appellant cleared goods without duty payment or proof of export, failing to establish export. The Tribunal cited precedents where duty liability arises if goods are not exported, rejecting the exemption claim and upholding the duty demand. Issue 3: Imposition of penalties on the appellant firm and partner: The Tribunal ruled that penalties under Section 11AC were not warranted as there was no diversion of goods into DTA. The appellant's failure to furnish export documents led to duty liability under Rule 19, not invoking Section 11AC. Penalties imposed on the appellant firm and partner were set aside, following the principle that once the firm is penalized, separate penalties on partners are not justified. In conclusion, the Tribunal upheld the duty demand and set aside penalties on the appellant firm and partner. The judgment clarified the duty liability for unexported goods, the burden of proof for exemption claims, and the principles governing penalties on firms and partners.
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