2015 (7) TMI 1295 - AT - Central Excise

Levy of Additional Excise Duty u/s 7 of the Sugar Export Promotion Act, 1958 - duty on quantity not exported or dispatched to Sugar Export Corporation - Held that - The condition precedent prescribed under Rule 5 of the Sugar Export Promotion Rules, 1973, i.e. the intimation to Department from the Export Agency is required for initiating action by the Central Excise Department, is not available as it is nowhere referred in the show cause notice or in the impugned order - the whole proceedings are ab initio void - appeal allowed - decided in favor of appellant.

Summary

Issues:
- Action against sugar manufacturers for apparent shortfall in export quota
- Interpretation of provisions of Sugar Export Promotion Act, 1958 and Sugar Export Promotion Rules, 1973
- Validity of Central Excise Department's action without intimation from Export Agency
- Previous Tribunal rulings on similar cases

Analysis:

The judgment deals with the appeal against a common Order-in-Original passed by the Commissioner of Central Excise, Pune-II, concerning action taken against sugar manufacturers for a perceived shortfall in export quota. The Central Excise authorities initiated action based on inspections indicating discrepancies in dispatch figures to the 'Sugar Export Corporation.' The issue revolved around the demand for Additional Excise Duty under the Sugar Export Promotion Act, 1958. This was the second round of litigation, with a previous Tribunal order directing verification of the Export Agency under the Act.

The appellants argued that the Central Excise Department's action was void from the outset as it did not follow the prescribed procedure under Rule 5 of the Sugar Export Promotion Rules, 1973. They highlighted that the Department acted without intimation from the Export Agency, as required by the rule. The appellants also presented certificates from the Export Corporation confirming fulfillment of export quota obligations, further challenging the Department's actions.

The Tribunal examined the contentions and found that the absence of intimation from the Export Agency, as mandated by Rule 5, rendered the proceedings void ab initio. Citing previous Tribunal rulings, the judgment emphasized the importance of adherence to procedural requirements and the significance of Export Agency notifications. Notably, the Tribunal referred to specific cases where similar issues were decided in favor of the appellants due to procedural lapses by the Central Excise Department.

Consequently, the Tribunal allowed the appeals, setting aside the impugned order. The appellants were granted consequential benefits as deemed appropriate. The judgment underscored the necessity of procedural compliance and adherence to statutory requirements in matters concerning duty demands under the Sugar Export Promotion Act, 1958.