2016 (1) TMI 766 - AT - Central Excise

Allegation of fraudulent export of goods to Nepal - demanding duty and denial of cenvat credit along with interest and imposing penalty on both the appellants - Held that - As per the condition IV of the said notification no. 45/2001-CE(NT) dated 26.06.2001 the goods were required to be presented before Nepalese custom office and who has to endorse the certificate of the goods received in Nepal and is required directly sent to the officer of the Custom in charge and it is the duty of the custom in charge to send the duplicate copy of invoice to central excise officer to comply the said condition, appellant have no role to play. It is the departmental internal correspondence to ascertain the fact that export is complete or not. For the lapses of the department, appellant cannot be held faulted. Therefore, duty cannot be demanded from the appellant. With these observations, as find that appellant has been able to prove his case of export of the goods to Nepal. Therefore, no duty can be demanded from the appellant and Cenvat Credit cannot be denied. As duty cannot be demanded from the appellant penalties on both the appellants is not imposable. With these terms, impugned order is set aside. Appeals are allowed with consequential relief if any.

Summary

Issues:
Appeal against duty demand, denial of Cenvat Credit, interest, and penalty.

Analysis:
The case involved appeals against an order demanding duty, denying Cenvat Credit, and imposing penalties on the appellants. The dispute arose when it was alleged that the appellants had fraudulently exported goods to Nepal without following the required procedures and had illegally claimed incentives. The adjudicating authority had upheld the allegations, leading to the appeals.

The appellant argued that they had provided sufficient evidence of export, including invoices, shipping bills, and payment receipts. They contended that the allegations were baseless, and the proceedings should be set aside. However, the Revenue pointed out that the appellant failed to produce evidence from Nepal confirming the receipt of goods, thus violating the notification terms.

Upon examination, it was found that the appellant had indeed issued invoices, filed shipping bills, and received payments for the exported goods. The only contention was the failure to comply with a specific condition regarding presenting goods before Nepalese customs officers and providing duplicate copies of invoices. The appellant argued that this was the department's responsibility, not theirs.

The tribunal concluded that the appellant had successfully proven the export of goods to Nepal. As the duty demand was unjustified, the denial of Cenvat Credit and imposition of penalties were also deemed unwarranted. The impugned order was set aside, and the appeals were allowed with consequential relief, if any.

In summary, the judgment favored the appellant, emphasizing that the duty could not be demanded due to the lapses in departmental procedures, absolving them of fault and penalties.