2003 (8) TMI 424 - AT - Central Excise

Summary

Issues: Duty payable on quantity of imported goods received short in factory.

Analysis:
1. Issue of Duty Payment on Short Received Imported Goods:
- The appeal raised the question of whether duty is payable by the appellant on the quantity of imported goods received short in their factory.
- The appellant, a manufacturer of Hydrogenated Vegetable Oil, imported various oils and availed concessional customs duty rates after complying with necessary conditions and procedures.
- The Joint Commissioner demanded duty due to the quantity of oil received in the factory being less than that cleared under the Bill of Entry.
- The appellant argued that handling processes at the port, especially for liquid goods transported in tankers, result in inevitable losses, which are not measured after transfer, leading to a lesser quantity at the destination.
- They contended that no certificate regarding the handling loss is issued by port authorities or customs, and there was no allegation of non-accountal or disposal of goods by the appellant.
- Citing a previous Tribunal decision and Supreme Court confirmation, they argued against duty payment for minor losses in quantity, especially for volatile substances.

2. Interpretation of Customs Rules and Notification:
- The Departmental Representative countered, stating that the exemption benefit is only applicable when vegetable oil is imported for manufacturing oil known as vanaspati.
- As the quantity received short in the factory was not used for manufacturing vanaspati oil, the benefit of the notification should not extend to the appellant.

3. Judicial Findings and Decision:
- The Commissioner (Appeals) found that there was a significant quantity discrepancy between imported and received vegetable oil by the appellant.
- The absence of short landing or despatch certificates to support the claim of loss was noted.
- The Tribunal observed that the appellant failed to provide evidence or correspondence with port authorities regarding the alleged loss during handling.
- Relying on Customs Rule 8, which mandates recovery of duty for goods not used for the intended purpose, the demand for duty was upheld.
- The Tribunal differentiated the present case from previous case law, emphasizing that the quantity discrepancy was not notional but factual as per the Bill of Entry.
- Consequently, the appeal was dismissed, affirming the duty demand under Rule 8 of the Customs Rule, 1996.

In conclusion, the judgment clarified the duty payment obligations concerning short-received imported goods, emphasizing compliance with customs rules and the intended purpose of imports. The decision highlighted the necessity of supporting documentation and evidence to substantiate claims of quantity discrepancies, ultimately upholding the duty demand due to the unutilized imported goods for the intended manufacturing purpose.