2018 (11) TMI 417 - AT - Central Excise

100% EOU - demand of duty on the ground that the appellant has not directly exported the goods - case of the Revenue is that the appellant being 100% EOU, therefore, the export is to be made by the appellant directly and not through the merchant exporter against H form - Held that - The said issue has already been settled by this Tribunal in the case of COMMISSIONER OF CENTRAL EXCISE, DELHI-I VERSUS SIGMA PNEUMATICS PVT. LTD. 2017 (11) TMI 975 - CESTAT NEW DELHI holding that when the goods has been exported through merchant exporter, the same shall be deemed as export made by the appellant only - appeal allowed - decided in favor of appellant.

Summary

Issues:
1. Duty demand on goods exported through a merchant exporter by a 100% EOU.
2. Validity of demanding duty on goods deemed to be exported.
3. Applicability of procedural lapses on substantive benefits in exports.

Analysis:
1. The appellant, a 100% EOU, appealed against duty demand for exporting natural honey through a merchant exporter instead of directly. The Revenue contended that as a 100% EOU, the appellant should export directly, not through a merchant exporter. Duty was demanded, and penalty imposed. The Tribunal referred to a previous case where it was held that demanding duty on goods deemed to be exported when export is not in question is unjustified. The Tribunal upheld that when goods are exported through a merchant exporter, it is deemed as export by the appellant, setting aside the duty demand against the appellant.

2. The Tribunal cited a case where it was observed that procedural lapses should not deny substantive benefits in exports. In the present case, the Tribunal found that the deemed export was not in question, as mentioned in the adjudicating authority's order. Following the precedent, the Tribunal declined to interfere with the impugned order, sustaining it based on the settled issue that goods exported through a merchant exporter are deemed as exports by the appellant. Consequently, the impugned order was set aside, and the appeal was allowed with consequential relief.

3. The Tribunal's decision was based on the settled principle that when goods are exported through a merchant exporter, they are deemed as exports by the appellant. This approach aligns with the legal stance that procedural lapses should not hinder substantive benefits in exports. By recognizing the export through the merchant exporter as valid, the Tribunal provided relief to the appellant, emphasizing the importance of substance over procedural technicalities in export matters. The judgment highlights the significance of honoring the substantive export transactions despite procedural irregularities, ensuring fair treatment for exporters.