2015 (10) TMI 1778 - AT - Central Excise

Benefit of Notification No. 9/2003-C.E., dated 1-3-2003 - DTA clearance versus export - payment of duty at the concessional rate of 9.6% - Held that - as the Notification No. 9/2003-C.E., is clearly not applicable, even as per the above-quoted para of the Central Excise Manual, the rate of duty on the impugned exported goods cannot be in accordance with the Notification No. 9/2003-C.E., as that Notification is applicable to the specified goods cleared into domestic tariff area. However, we agree with the contention of the appellants that they have paid the duty as per the said notification believing it to be applicable and in any case the duty paid was refundable to them and therefore, they could not have had an intention to evade any duty - Decided in favour of Revenue.

Summary

Issues:
- Applicability of Notification No. 9/2003-C.E. to exported goods
- Interpretation of Chapter 8 of the Central Excise Manual
- Imposition of penalties for duty payment discrepancy

Analysis:

The appeal was filed by the Revenue against an Order-in-Appeal that set aside Orders-in-Original confirming duty demands and penalties imposed on the respondent. The respondents availed the benefit of Notification No. 9/2003-C.E. for domestic clearances and also exported goods at a concessional rate of 9.6% under the same notification. The original adjudicating authority held that this concessional rate was only applicable for domestic clearances, not exports. The Commissioner (Appeals) cited a supplementary instruction in Chapter 8 of the Central Excise Manual, stating that export goods should be assessed to duty in the same manner as goods for home consumption. The Revenue contended that the concessional rate did not apply to exports, making the Commissioner's order improper. The respondents argued that the duty paid was refundable and there was no intention to evade duty.

Upon review, the Tribunal found that Notification No. 9/2003-C.E. exempted clearances for home consumption, indicating that the concessional rate should not have been applied to exports. The Tribunal clarified that the duty on exported goods should align with the Central Excise Tariff Act and related rules, not the concessional rate under the notification. However, acknowledging that the appellants paid duty believing the notification applied and that the duty was refundable, the Tribunal agreed that there was no intent to evade duty, thus ruling out the need for penalties. Consequently, the Tribunal upheld the demand for duty with interest but upheld the Order-in-Appeal's decision to set aside the penalties imposed.