2016 (9) TMI 836 - AT - Central Excise

Duty liability - sugar cleared for export but was not exported - production of certificates issued by Indian Sugar and General Industry Export Import Corporation, New Delhi - Held that - the export agency has categorically stated in the various certificates issued by them to the appellant that the appellant has fulfilled their obligation of export of sugar against the quota allotted to them. Such documents/certificates are not contested by the Revenue. One of the certificates is dated 20th September 1996 annexed at page No.62 of the appeal memoranda specifically states that the appellant has fulfilled the export quota obligation as directed by the said Corporation. We are at a loss to understand how the adjudicating authority as well as the first appellate authority came to a conclusion that the appellant has not delivered the sugar meant for export to such export agency. It is found that the lower authorities while investigating the case has not recorded any statement of any official of the export agency to hold that they had given the certificates to the appellant without receiving sugar for export. In the absence of any such contrary evidence, a certificate issued by one of the authorities who has been appointed by a statute, cannot be overlooked by the lower authorities. We have to hold that the appellant has exported the sugar as is required to be done by them, hence the impugned order that confirmed the demands with interest and penalty needs to be set aside. - Decided in favour of appellant

Issues involved: Duty liability on sugar cleared for export but not exported, interpretation of provisions of Sugar Export Promotion Act, 1958, obligation to deliver sugar quota to export agency, validity of certificates issued by export agency, absence of evidence regarding non-delivery of sugar to export agency.

Analysis:

1. Duty liability on sugar cleared for export but not exported:
The case revolved around the duty liability of the appellant on sugar cleared for export but allegedly not exported. The Revenue contended that the appellant failed to discharge the duty liability, while the appellant argued that they had fulfilled their export obligation with certificates from the export agency. The lower authorities relied on provisions of the Sugar Export Promotion Act, 1958, to hold the appellant liable for duty. However, the Tribunal found in favor of the appellant, emphasizing the certificates issued by the export agency confirming the fulfillment of the export quota obligation. The Tribunal noted the absence of evidence supporting the Revenue's claim of non-delivery of sugar to the export agency, ultimately setting aside the impugned order confirming the demands.

2. Interpretation of provisions of Sugar Export Promotion Act, 1958:
The Tribunal analyzed the provisions of the Sugar Export Promotion Act, specifically Section 8(1, to determine the obligations regarding sugar export through the designated export agency. While the Revenue argued that the appellant failed to deliver the sugar quota to the export agency as required by the Act, the Tribunal highlighted the certificates from the export agency stating otherwise. The Tribunal's interpretation favored the appellant, considering the statutory appointment of the export agency and the lack of contradictory evidence regarding the delivery of sugar.

3. Obligation to deliver sugar quota to export agency:
The dispute also centered on the appellant's obligation to deliver the allocated sugar quota to the export agency for export. The Revenue contended that there was no documentary evidence of the sugar quota being delivered, leading to the duty liability. However, the Tribunal found the certificates issued by the export agency to be crucial evidence, indicating the fulfillment of the export obligation by the appellant. The Tribunal stressed the importance of these certificates in determining compliance with the obligation to deliver the sugar quota, ultimately ruling in favor of the appellant.

4. Validity of certificates issued by export agency:
A significant aspect of the case was the validity and reliability of the certificates issued by the export agency confirming the appellant's fulfillment of the export quota obligation. The Tribunal scrutinized these certificates, particularly one dated 20th September 1996, which explicitly stated the appellant's compliance with the export requirements. Despite the Revenue's objections, the Tribunal upheld the credibility of these certificates, noting the absence of contradictory evidence or statements from the export agency officials regarding non-receipt of the sugar meant for export. The Tribunal emphasized the statutory authority of the export agency in issuing such certificates, leading to the decision to set aside the impugned order.

In conclusion, the Tribunal's detailed analysis of the provisions of the Sugar Export Promotion Act, the validity of certificates from the export agency, and the absence of concrete evidence supporting the Revenue's claims culminated in the decision to allow the appeal and set aside the order confirming duty liability, interest, and penalty against the appellant.

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