2017 (11) TMI 975 - AT - Central Excise

Export of goods - whether the demand of Central Excise duty against the assessee in respect of goods said to be exported through merchant exporter and EOUs is correct or not, particularly when the respondent-assessee has submitted Form H issued by the State Sales Tax Departments as proof of export? - Held that - there is no dispute regarding export of the said goods - When the export of the goods is not in question, then there is no justification to demand the Central Excise duty on the goods which have been deemed to be exported - appeal dismissed - decided against Revenue.

Summary

Issues:
- Disputed demand of Central Excise duty on goods deemed to be exported through merchant exporter and EOUs.
- Interpretation of export procedures and Circular No. 648/39/2002-CX.
- Application of the principle of deemed exports.
- Relevance of Form H issued by State Sales Tax Departments as proof of export.
- Precedents set by Tribunal and High Court regarding procedural lapses in export cases.

Analysis:
The Appellate Tribunal CESTAT NEW DELHI heard an appeal filed by the Department against the Order-in-Appeal passed by the Commissioner (Appeals), Central Excise, Delhi-I for the disputed period of 2009-10 and 2010-11. The respondent-assessee, engaged in manufacturing excisable goods, failed to follow procedures under Simplified Export Procedure, leading to a demand of duty, penalties, and interest. The main issue revolved around whether the demand of Central Excise duty against the assessee for goods deemed to be exported through merchant exporter and EOUs was justified. The adjudicating authority demanded duty on goods deemed to have been exported, despite proof of export submitted by the assessee in the form of Form H issued by the State Sales Tax Departments.

The Commissioner (Appeals) based the decision on a Tribunal case precedent (Vadapalani Press v. CCE, Chennai) and the principle that if exports have genuinely taken place, procedural lapses should not deny substantive benefits. The Tribunal referenced a High Court judgment (Ford India Pvt. Ltd. v. Assistant Commissioner of Central Excise, Chennai) emphasizing condoning procedural infractions when actual exports occurred. In this case, since the export of goods was not in question, the Tribunal upheld the impugned order, citing the principle that there was no justification to demand Central Excise duty on goods deemed to be exported.

Ultimately, the Tribunal dismissed both appeals filed by the Department, affirming the impugned order and sustaining it based on the established legal principles and precedents. The decision was pronounced in open court on 12-4-2017, providing a comprehensive analysis of the issues and legal reasoning behind the judgment.