2021 (1) TMI 805 - HC - Central Excise

Actual export taken place or not - It is the case of the Revenue that when the goods liable to excise duty came to be exported by the appellant, the appellant was required to follow the procedure for export without payment of duty as prescribed under the Notification No.42/2001-CE (N.T.) dated 26th June 2001, as amended, issued under Rule 19 of the Central Excise Rules, 2002 - HELD THAT - There was no good reason for the appellate tribunal to remand the matter to the adjudicating authority. We take notice of the fact that during the pendency of the adjudication proceedings certain information was called for by the Deputy Commissioner from the Superintendent, Central Excise Range-I, Navsari - The Superintendent has, in no uncertain terms, stated in his report that the goods were actually exported and the same is evidenced by the documents in the form of shipping bills and BRC for the entire period covering the show-cause notice. The goods were exported under the drawback scheme and focus license. The appellate tribunal, on its own, could have looked into the report instead of remitting the entire matter to the adjudicating authority for the purpose of passing a fresh order, more particularly, being convinced as regards the export of goods - appeal allowed by way of remand.

Summary

Issues Involved:
1. Remand of proceedings by the Appellate Tribunal.
2. Non-compliance with Notification No.42/2001-CE and its impact on the demand for duty.

Issue-Wise Detailed Analysis:

1. Remand of Proceedings by the Appellate Tribunal:
The first issue revolves around whether the Appellate Tribunal was correct in remanding the proceedings to the adjudicating authority for passing a fresh order, despite neither party requesting such a remand. The appellant argued that the Tribunal should have set aside the order of the Respondent after determining that the demand for duty could not be sustained due to non-compliance with the procedure under Notification No.42/2001-CE.

The High Court noted that the Appellate Tribunal had remanded the matter to the adjudicating authority to consider new documents obtained under the RTI, which were not available during the original adjudication. However, the High Court found that this remand was unnecessary. The Superintendent had already verified and confirmed the export of goods through shipping bills and BRCs, and the goods were exported under the AIR Drawback Scheme and Focus License. Therefore, the High Court concluded that the remand would be an "empty formality" and that the Tribunal should have resolved the matter itself.

2. Non-Compliance with Notification No.42/2001-CE:
The second issue addresses whether the demand for duty could be sustained given the non-compliance with Notification No.42/2001-CE. The Appellate Tribunal had found that the appellant did not follow the procedure prescribed under this notification but was instead following a simplified procedure as per Circular No.705/21/2003-CX dated 8.04.2003, which was applicable to units primarily engaged in exports.

The High Court observed that the Tribunal had recognized the appellant's compliance with the simplified procedure and noted that there was no significant dispute regarding the actual export of goods. The Tribunal had directed the adjudicating authority to verify the new documents submitted by the appellant, but the High Court found that the Superintendent's report already provided sufficient evidence of the exports. Consequently, the High Court held that the demand for excise duty could not be sustained on the basis of non-compliance with Notification No.42/2001-CE when the actual export of goods was established.

Conclusion:
The High Court allowed the appeal, quashing the remand order by the Appellate Tribunal and affirming the rest of the Tribunal's order. The Court concluded that the remand was unnecessary given the existing evidence of export compliance, thus resolving both substantial questions of law in favor of the appellant-assessee.