2018 (2) TMI 533 - AT - Central Excise

Proof of supply of goods to SEZ - Held that - in accordance with the procedure in the special economic zone the authorized officer had apparently dispatched the duly discharged ARE-1s to the jurisdictional range officer of the appellant. Accordingly the proper course of action for the lower authorities should have been to ascertain the correct position from the range officer - matter restored to the original authority for proper ascertainment - appeal allowed by way of remand.

Summary

Issues involved:
Confirmation of recovery demand, imposition of penalty for non-submission of required proof for supply of goods to Special Economic Zones.

Analysis:
The Central Excise (Appeals), Mumbai - II confirmed the recovery demand of `3,79,040 along with interest and penalty for failure to produce two duly discharged ARE-1s related to the supply of uninterrupted power supply systems to units in Special Economic Zones by the appellant, M/s Emerson Network Power (I) Pvt Ltd. The appellant contended that the goods were supplied, received consideration, and no diversion occurred. However, the first appellate authority failed to properly consider the documentation provided, leading to a partial allowance of the appeal but confirmation of the lower authority's order.

The appellant had provided documentation supporting their claim that the goods were not diverted, and the authorized officer had dispatched the duly discharged ARE-1s to the appellant's range officer as per SEZ procedures. The failure of the lower authorities to verify this information necessitated setting aside the impugned order and restoring the matter to the original authority for proper ascertainment. The appellant is to be given an opportunity to defend themselves in case of a negative report from the range officer.

The judgment concluded by disposing of the appeal through remand, emphasizing the importance of proper verification and giving the appellant a fair chance to present their case.