2016 (3) TMI 259 - AT - Central Excise

Liability to pay the excise duty - consignee does not sent the certificate of re-warehousing within the period of 90 days - appellant are liable to pay the duty involved in the final product cleared to M/s. CFC India Services P. Ltd. on the ground that the appellant did not receive the duplicate copy of the certificate duly endorsed by the consignee - Held that - It is a fact that with regard to the same consignee the Asst. Commissioner of Customs issued a letter to M/s. CFC India Services P. Ltd. demanding the duty and interest for violation of the conditions of notification 22/03 and the appellant s customer M/s. CFC India Services P. Ltd. has paid the entire duty of excise along with interest to the department and thereafter with regard to the same consignment the department cannot ask the appellant to pay the duty as the department cannot recover the duty twice for the same consignment and moreover as per the sub-clause (3) of Rule 20 it is the responsibility of the buyer to pay the duty and in the absence of non-payment, recovery proceedings can be initiated against the buyer. In this case the said duty was recovered. Therefore, find that the appellant is not liable to pay duty. Therefore, the entire demand is time barred as the show-cause notice has been issued beyond one year, which is the normal period of limitation and the Revenue has failed to prove suppression of facts with intend to evade payment of duty. - Decided in favour of assessee

Summary

Issues involved:
- Interpretation of Notification No. 22/03 dated 31.03.2003 regarding exemption from excise duty for goods supplied to specific units.
- Liability of the appellant for payment of excise duty when consignee fails to provide re-warehousing certificate within 90 days.
- Application of Rule 20 of Central Excise Rules, 2002 in determining duty payment responsibility.
- Invocation of extended period of limitation for issuing show-cause notice beyond one year.
- Double recovery of duty for the same consignment.

Analysis:
1. Interpretation of Notification No. 22/03: The appellant contended that they correctly cleared final products to a customer without excise duty payment by availing the benefit of the said notification. The customer later paid the duty and interest as directed by the Asst. Commissioner, which the department accepted. Citing Indian Oil Corporation v. CCE, the appellant argued against double recovery of duty, emphasizing that the department cannot demand duty twice for the same clearance.

2. Liability for non-receipt of re-warehousing certificate: The department argued that the appellant should pay duty as the consignee failed to provide the certificate within 90 days. However, the Tribunal found that since the customer already paid the duty and interest for the same consignment, the appellant cannot be held liable again. Rule 20(3) places duty payment responsibility on the consignee, and recovery proceedings can be initiated against the buyer in case of non-payment.

3. Application of Central Excise Rules: The appellant highlighted Rule 20, stating that the consignor is not at fault for non-receipt of the warehousing certificate. They emphasized that the consignee's responsibility for duty payment is clear under Rule 20(3) and (4), supporting their argument against liability.

4. Extended period of limitation: The appellant argued that the show-cause notice issued beyond one year for a clearance made in May 2007 is time-barred. They contended that the extended period cannot be invoked due to the absence of suppression of facts to evade duty payment.

5. Double recovery of duty: The Tribunal concluded that the demand was time-barred and not sustainable in law. As the department failed to prove suppression of facts, the appellant was not liable for duty payment. The appeal was allowed, setting aside the impugned order with consequential relief, if any.