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2017 (3) TMI 1503 - AT - Central ExciseWhether the manufacturer had removed excisable goods under bond-ARE-1 on 31/03/2005, which were finally exported, after delay, on 10/03/2006 and had filed the evidence of export before the Assessing Authority? Whether issue of SCN dated 30/03/2006, for levy of duty and penalty is just and proper? Held that - there is no dispute on the fact of export - further, there was no revenue implication, since the goods meant for export have been finally exported. Thus, the situation became revenue neutral and no SCN was required to be issued. As on the date of the issue of SCN, there was no case of duty being unpaid or short paid and/or the export having not taken place. The Adjudicating Authority should have allowed further time to file additional evidence, if required, in the shape of Shipping Bill & Bill of Lading - further the appellant have brought on record, Banking Realization Certificate, with respect to the export of goods under the bond - appeal allowed - decided in favor of appellant.
Issues involved:
1. Whether the delay in exporting excisable goods under bond justifies the issuance of a Show Cause Notice for levy of duty and penalty. Detailed analysis: The issue in this appeal revolves around the delay in exporting excisable goods under bond and whether the subsequent issuance of a Show Cause Notice for duty and penalty is justified. The manufacturer-assessee, M/s Swati Menthol & Allied Chemicals Ltd., had removed excisable goods under bond - ARE-1 on 31/03/2005, which were eventually exported after a delay on 10/03/2006. The central question is whether the Show Cause Notice dated 30/03/2006, demanding duty and penalty, was warranted given the circumstances. The appellant argued that as the goods were cleared to a merchant exporter, they had limited control over the export process. The contention was that no Show Cause Notice was necessary as the export, albeit delayed, was revenue neutral, and the government's policy does not aim to export taxes. The appellant sought relief by challenging the duty demand and penalty imposed. The facts of the case reveal that the appellants were engaged in manufacturing and selling Menthol and Essential Oils falling under specific chapters of the Central Excise Tariff Act. They had cleared a consignment of Menthol BP for export without duty payment through a merchant exporter. Due to the exporter's delay, the evidence of export could not be submitted within the stipulated time frame, leading to a demand for duty payment with interest. Despite the delay, the goods were eventually exported, as confirmed by the Assessing Authority. However, a Show Cause Notice was issued on 30/03/2006, demanding duty, interest, and penalty. The Commissioner (Appeals) upheld the duty demand and penalty citing non-compliance with the prescribed export time limit. The appellant challenged this decision before the Tribunal, arguing against the necessity of the Show Cause Notice and emphasizing the revenue-neutral nature of the export. Upon considering the arguments presented, the Tribunal found that the export did take place, rendering the situation revenue neutral. It was noted that at the time of the Show Cause Notice issuance, there was no case of unpaid or short-paid duty, nor was there any failure in export. The Tribunal opined that the Adjudicating Authority should have allowed additional time for filing evidence such as the Shipping Bill and Bill of Lading. The appellant also provided a Banking Realization Certificate regarding the export under bond. Consequently, the Tribunal allowed the appeal, setting aside the impugned order. The appellant was deemed entitled to any consequential benefits as per the law. In conclusion, the judgment delves into the intricacies of excisable goods export under bond, addressing the implications of delays, duty demands, and penalty imposition. The Tribunal's decision underscores the importance of considering the revenue-neutral aspect of exports and the necessity of procedural fairness in adjudicating such matters.
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