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Issues:
Validity of impugned order-in-appeal affirming duty demand and penalty. Analysis: In this appeal, the appellants challenged the validity of the impugned order-in-appeal dated 16-7-2002, which affirmed the order-in-original regarding a duty demand of Rs. 17,274.34 with a penalty of Rs. 1,000. The appellants had cleared Paper Grey Board to their merchant-exporter without payment of duty under Rule 13(1)(a) of the Central Excise Rules. The clearance was made under the self-removal procedure, but the Block Transfer Certificate, a prerequisite, was not procured before the clearance. The duty demand was raised against the appellants for clearing goods without payment of duty. The appellants contested the notice, arguing that duty liability could be enforced against the merchant-exporter who executed the B-1 Bond. The adjudicating authority confirmed the duty demand with penalty, which was upheld by the Commissioner (Appeals). Upon perusal of the impugned order, it was found that the duty demand was confirmed against the appellants because the merchant-exporter failed to produce the Block Transfer Certificate before the clearance of goods. However, it was undisputed that the merchant-exporter had executed the B-1 Bond before the goods were exported. The Board Circular clarified that in such situations, the liability lies with the merchant-exporter, not the manufacturer. As there was no evidence of any breach by the exporter or any action taken against them, the appellants could not be held liable for the duty demand and penalty. The lapse by the exporter in not obtaining the Block Transfer Certificate in time was rectified post-clearance, relieving the appellants of liability. Therefore, the impugned order of the Commissioner (Appeals) was set aside, and the appeal of the appellants was allowed with any consequential relief permissible under the law.
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