2005 (2) TMI 220 - AT - Central Excise

Summary

Issues: Revenue challenging dropping of duty and penalty by Commissioner (Appeals) based on duty liability on goods cleared in Domestic Tariff Area under specific notifications.

In this judgment by the Appellate Tribunal CESTAT, New Delhi, the Revenue challenged the correctness of an order-in-appeal where the Commissioner (Appeals) had dropped duty and penalty confirmed against the respondents by the adjudicating authority. The Revenue contended that the respondents should have paid duty on cotton yarn cleared in the Domestic Tariff Area under specific notifications, as they did not maintain separate records for goods manufactured from imported inputs versus indigenous raw material. However, the Tribunal found that the respondents, being a 100% EOU manufacturing cotton yarn, had cleared goods in the DTA after discharging duty liability under a particular notification. The Tribunal noted that the Revenue failed to substantiate with tangible evidence that the goods cleared in the DTA were produced from imported raw material, thus rejecting the Revenue's claim. The Tribunal upheld the Commissioner (Appeals)'s decision, as the respondents had maintained separate records for imported and indigenous raw materials, and the Revenue did not dispute the genuineness of these records. Consequently, the Tribunal dismissed the Revenue's appeal for lacking merit.

This judgment highlights the importance of maintaining accurate records and complying with duty liabilities under specific notifications when clearing goods in different areas. It emphasizes the need for Revenue to provide tangible evidence to support duty claims and the significance of not disputing genuine records maintained by the parties involved. The judgment serves as a reminder of the legal obligations and evidentiary requirements in matters related to duty payments and clearances in different tariff areas.