2017 (6) TMI 570 - AT - Customs

Diversion of goods for domestic sale - N/N. 53/1997-Cus. Dated 3.06.1997 - Held that - the appellant illicitly diverted the goods in local market, as re-warehousing certificates for such goods were not received by the Revenue; thus the appellant failed to fulfill the conditions of the N/N. 53/1997 making them liable for payment of duties of Customs on such raw material. In case of liability of duty of Customs the impugned order has observed that goods did not reach destination of the consignee and appeared to have been diverted illicitly for domestic sale - the appellant did not fulfill the conditions 4 and 7 of N/N. 53/97-Cus dated 03.06.1997 and therefore, is liable for payment of Customs duty - appeal dismissed - decided against appellant.

Summary

Issues:
- Liability for Central Excise duty and Customs Duty on diverted goods
- Compliance with Exemption Notification No.53/1997-Cus
- Failure to fulfill conditions of the notification
- Payment of Central Excise duty by the appellant

Analysis:
The case involved an appeal by M/s Ashoka International, a 100% EOU, against the confirmation of demands for Central Excise duty and Customs Duty along with interest and penalty. The appellant cleared Polyester Twisted Yarn to other 100% EOUs on deemed export basis without receiving re-warehousing certificates. A Show Cause Notice was issued proposing the recovery of duties on the clearances and on imported raw materials procured without payment of duty. The original adjudication confirmed the demands, and the impugned order-in-appeal upheld this decision.

The Tribunal considered the appellant's claim of benefit under Exemption Notification No.53/1997-Cus dated 3.06.1997. It was observed that the raw material claimed under the exemption was used in manufacturing goods that were illicitly diverted to the local market without fulfilling the conditions of the notification. The appellant failed to provide re-warehousing certificates, indicating a breach of the exemption conditions. The impugned order found the appellant liable for Customs duty due to the diversion of goods for domestic sale without reaching the consignee, as per the notification's requirements.

Regarding Central Excise duty, it was undisputed that the appellant cleared goods without payment of duties. The impugned order confirmed that the appellant had paid the Central Excise duty amounting to &8377; 3,83,478, which the appellant did not contest. Consequently, the Tribunal upheld the impugned order, dismissing the appeal for lacking merit based on the discussions and findings presented.

In conclusion, the judgment affirmed the demands for Customs Duty and Central Excise duty against the appellant due to the diversion of goods without fulfilling the conditions of the exemption notification. The decision highlighted the importance of compliance with statutory requirements and the consequences of failing to meet such obligations.