2000 (1) TMI 515 - AT - Central Excise

Summary

Issues:
- Duty liability on imported zinc alloy
- Penalty under Central Excise Rules
- Export obligation fulfillment under DEEC Scheme

Analysis:
1. Duty liability on imported zinc alloy:
The appellants, engaged in manufacturing and exporting electrical wiring accessories, imported zinc alloy without duty payment for use in their products meant for export. During a visit by revenue officers, a shortage of 11897.1 kg of zinc alloy was found. The appellants argued that the import was under duty-free licenses and export obligations were met. However, the authorities found discrepancies in fulfilling export obligations under the DEEC Scheme. The duty was demanded on the unaccounted zinc alloy, and a penalty was imposed under Central Excise Rules.

2. Penalty under Central Excise Rules:
The appellants contested the penalty, claiming faulty stock-taking due to non-uniformity in ingot sizes and weights. The revenue department argued that the appellants failed to demonstrate fulfilling export obligations during the visit when shortages were noted. The weighment was witnessed by an official who acknowledged the shortages. The duty-free import under the DEEC Scheme required accurate record-keeping, which the appellants failed to maintain. The adjudicating authority upheld the duty demand and penalty imposition, albeit reducing the penalty amount due to the circumstances of the case.

3. Export obligation fulfillment under DEEC Scheme:
The judgment highlighted the importance of fulfilling export obligations under the DEEC Scheme concerning duty-free imports. The appellants' failure to demonstrate meeting export obligations at the time of the visit led to the upheld duty liability and penalty. Despite producing a certificate later confirming export fulfillment, the appellants could not prove compliance during the inspection. The judgment emphasized the need for accurate documentation and timely fulfillment of export commitments under such schemes to avoid duty liabilities and penalties.

In conclusion, the appellate tribunal upheld the duty liability and reduced the penalty imposed on the appellants due to the circumstances of the case. The judgment underscored the significance of fulfilling export obligations under duty-free import schemes and maintaining accurate records to avoid discrepancies and penalties.