9911796707
|
Home
Issues involved: Appeal against decision imposing penalty under Rule 173Q of Central Excise Rules, duty demand under Section 11A of Central Excise Act, 1944, duty demand on capital goods u/s 28(1) of Customs Act, 1962, confiscation of garments u/s 111 of Customs Act, penalties u/s 112 & 114 on company directors.
Summary: 1. The appeal was made by a 100% Export Oriented Unit (EOU) against penalties and duty demands imposed by the Commissioner. The EOU was found to have imported capital goods duty-free for manufacturing readymade garments for export but failed to meet export obligations. Additionally, the EOU undertook job work without permission and allegedly made exports under claim for drawback. 2. The appellants argued that the garments found on the premises were rejects received for employee training, not for export. They also claimed to have made exports, contrary to the allegation of no exports. The Revenue contended that export obligations were not met, machines were removed without permission, and job work was done without authorization. 3. The Tribunal analyzed the legal provisions and held that Central Excise duty is only applicable to goods sold in India, not all manufactured goods. Citing a Supreme Court decision, it concluded that duty demands on the EOU did not relate to sales allowed in the Domestic Tariff Area. The penalty under Rule 173Q was deemed inapplicable to EOUs. 4. Regarding customs duty demands on capital goods and penalties, the Tribunal emphasized that action should be taken after informing the Development Commissioner. As no compliance with Ministry directives was shown, the demands and penalties under the Central Excise Act were not sustainable. 5. The Tribunal set aside the Commissioner's order and remanded the case for reconsideration, instructing the Adjudicator to follow Ministry circulars, establish the nature of exports made, and determine if the garments were for training or export purposes. The appeal was allowed on remand.
|
