2012 (12) TMI 543 - AT - Central Excise

Remission of Duty clearance of excisable goods from the factory of a Hundred Percent EOU. - calculation of duty - held that - The provision under Rule 21 of Central Excise Rules is for goods manufactured in a factory and goods have been lost or destroyed by natural causes or unavoidable accident before removal from factory. This provision is clearly not applicable. Sections 13 and 23 of Customs Act are applicable to goods imported into the country and which are not yet cleared out of the customs area. These provisions are not clearly applicable. The argument that these goods are to be treated as imported goods is being raised apparently for the reason that duty at rate prescribed in Customs Tariff is being demanded. This is not the correct position. Duty being demanded is excise duty. Duty payable is calculated at rates prescribed in Customs Tariff. Imposition of Penalty - held that - There are mitigating factors in favour of the appellant. Revenue has not been able to prove any mala fide intentions of the appellant - penalty imposed on the appellants is set aside - Thus appeal is allowed partially.

Issues:
1. Restoration of appeal before the Tribunal.
2. Demand of duty on unaccounted goods.
3. Time limitation for duty demand.
4. Applicability of provisions under Customs Act and Central Excise Act.
5. Claim of remission of duty.
6. Liability for goods lost in custody.
7. Calculation of duty and presumption of export.
8. Imposition of penalty under Section 114(ii) of the Customs Act and Rule 26 of Central Excise Rules.
9. Mitigating factors for setting aside the penalty.

Restoration of Appeal:
The Tribunal restored the appeal after the High Court and Supreme Court interventions, directing the case to be decided based on available submissions.

Demand of Duty on Unaccounted Goods:
The appellant failed to meet export obligations, leading to a demand for duty on unexported goods. The Show Cause Notice confirmed the duty demand, interest, and penalty under relevant provisions.

Time Limitation for Duty Demand:
The appellant argued the demand was time-barred, but the Tribunal found the demand within the one-year limit under Section 11A of the Central Excise Act.

Applicability of Provisions:
The Tribunal clarified that duty demand was for excise duty, not customs duty, and analyzed the applicability of various provisions under the Customs Act and Central Excise Act.

Claim of Remission of Duty:
The appellant's claim for remission of duty on lost goods was considered, but the Tribunal found it not applicable under relevant sections.

Liability for Goods Lost in Custody:
The appellant claimed goods were lost in the port under the custodian's care, but the Tribunal noted lack of clear evidence and examination by authorities.

Calculation of Duty and Presumption of Export:
The duty was calculated based on rates for goods cleared to Domestic Tariff Area (DTA), with the Tribunal emphasizing the need for proof of export to avoid duty payment.

Imposition of Penalty:
The Tribunal found ambiguity in the penalty imposition under Section 114(ii) of the Customs Act and Rule 26 of Central Excise Rules, setting aside the penalty due to lack of clear findings.

Mitigating Factors for Penalty Set Aside:
Considering mitigating factors and absence of proof of mala fide intentions, the Tribunal set aside the penalty imposed on the appellant partially.

This detailed analysis highlights the restoration of the appeal, duty demand on unaccounted goods, time limitations, applicability of legal provisions, remission claim, liability for lost goods, duty calculation, penalty imposition, and factors leading to setting aside the penalty.

← Previous Next →