2005 (4) TMI 163 - AT - Central Excise

Summary

Issues: Duty Exemption Scheme compliance, Export procedure under AR-4, Reliability of evidence of export

Duty Exemption Scheme compliance:
The appellant imported woollen fabrics under Duty Exemption Scheme and sought permission to send them to a job worker for conversion into suits for export. The Assistant Commissioner granted permission subject to a Bond for safeguarding duty. The appellant exported part of the suits after bringing them back to its factory and directly exported the remaining suits from the job worker's premises. The duty demand of over Rs. 18 lakhs was confirmed with penalty, based on the argument that the suits directly exported from the job worker's premises should have been brought back to the factory for export under AR-4 procedure. The Commissioner (Appeals) held the evidence of export submitted by the appellant as "totally unreliable."

Export procedure under AR-4:
The appellant contended that the suits were exported from Delhi Airport with evidence in the form of shipping bills, correlating the exported suits with the imported fabrics by quantity and other particulars. The appellant argued that the duty demand was unjustified, as the Customs authorities had verified and accepted the export under the DEEC scheme. The appellant maintained that the duty demand was not sustainable, given the acceptance of export under the DEEC scheme and the Commissioner's finding of correlation being "totally unreliable."

Reliability of evidence of export:
The learned SDR argued that the duty demand was justified because the appellant did not follow the procedure of bringing the goods to its own factory for export under AR-4. However, the Tribunal found that the appellant's obligation under the duty exemption scheme was fulfilled as the woollen fabrics were sent to job workers for production, suits were manufactured and exported directly from the job worker's premises. The Customs authorities had accepted the export as meeting the DEEC licence requirements, leading to the conclusion that the duty demand and other proceedings were unwarranted. As a result, the Tribunal set aside the impugned order, allowing the appeal.

(Operative part of the Order was already pronounced in the open Court on 21-4-2005).