2019 (3) TMI 1089 - AT - Central Excise

Clearances to EOUs and SEZs - benefit of N/N. 22/2003-CE dated 31-3-2003 and 53/2003-Cus (NT) dated 22/7/2003 - denial of benefit on the ground that the appellants did not produce Re-warehousing certificates in respect of such clearances - Held that - The Appellants are only reiterating that the re-warehousing certificates are not available/traceable. They are not forthcoming to submit whether the said certificates was lost in transit or misplaced and if so any FIR was lodged with relevant authorities. The revenue are not accepting the letters and CA certificates submitted by the Appellants and at the same time the revenue is also not forthcoming on if any steps were taken to find out from the respective range / division officer of the customers of the Appellants whether said goods have been received by them. Both the notifications in question and the board circulars issued in this regard cast an obligation on the Appellants as well as the department at the end of supplier as well as receiver. The goods in question are removed and received under bond and necessary accounting needs to take place at the supplier as well as receivers end - It is seen that in terms of circular No.579/16/2001 dated 26.06.2001, the superintendent in charge of the consignor of Excisable goods is required to send weekly reminders to the superintendent in charge of the consignee. It is also seen that the Deputy/ Assistant Commissioner shall secure a satisfactory proof of the goods having been received by the consignee / ensure that the duty of excise on the goods not received at the destination is recovered from the consigner. In the present case, no such efforts have been made by the department. In the entire chain of events officers at the consignees end would certainly be in a position to confirm the receipt of the goods or otherwise from their own records as well as the records of the consignees. Therefore it is in the interest of justice that the matter needs to go back to the original adjudicating authority to make necessary enquiries with the division/range of consignors of the Appellant so as to confirm whether the goods were received. Appeal allowed by way of remand.

Summary

Issues:
- Allegation of non-submission of Re-warehousing certificates for clearances to EOUs and SEZs
- Upholding of orders by Commissioner (Appeals, Mumbai Zone-II)
- Imposition of penalties and demands confirmed by authorities
- Submission of collateral evidence by the Appellants
- Obligation of the department and registered person of the warehouse
- Failure to discharge obligations as per notifications and circulars
- Lack of efforts by the department in confirming receipt of goods
- Remand of the case to the original adjudicating authority

Analysis:
The judgment revolves around the case where M/s Godrej & Boyce Mfg. Co. Ltd. made clearances to EOUs and SEZs between October 2003 to November 2008, availing duty exemption under specific notifications. The department alleged non-production of Re-warehousing certificates for these clearances, leading to the issuance of Show Cause Notices periodically. The Commissioner (Appeals, Mumbai Zone-II) upheld the orders confirming duties and imposing penalties. The Senior Advocate for the Appellants argued that there were no allegations of diversion of goods, and collateral evidence such as customer letters and CA Certificates were submitted. It was emphasized that the department failed to follow procedures and cannot take advantage of its own lapses to conclude non-receipt of certificates.

The Appellants contended that penalties should not be imposed, and the extended period should not apply. They cited various cases in support of their arguments. On the other hand, the department's representative highlighted the Appellants' failure to produce re-warehousing certificates or pay duty within the specified period. The department relied on a Supreme Court judgment to support their stance.

After hearing both sides, the Tribunal found that both the Appellants and the department failed to fulfill their obligations as per the notifications and circulars. It was noted that the Appellants did not provide clarity on the whereabouts of the certificates and the department did not take adequate steps to confirm receipt of goods. The Tribunal emphasized the obligations on both the supplier and receiver, as outlined in the circulars. It was observed that necessary enquiries were not made by the department to ascertain the receipt of goods by the consignees.

Consequently, the Tribunal allowed all appeals by remanding the case to the original adjudicating authority. The matter was directed to be further investigated to confirm whether the goods were indeed received by the consignees. The judgment highlights the importance of fulfilling obligations under the relevant notifications and circulars and the need for thorough investigations to establish the facts in such cases.