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2022 (10) TMI 692 - AT - Central ExciseExport or not - removal of goods to SEZ without execution of bond - execution of Bond or Letter of Undertaking as required under Rule 19 ibid - non-submission of proof of export in respect of such removal - demand alongwith penalty - HELD THAT - As per the procedure set out in Notification No.42/2001-CE(NT), the duplicate copies of the relevant ARE-1 should have come to the concerned Range Officer as mentioned in the ARE-1s. The Department could have reconciled/tallied the desired particulars from such duplicate copies supposed to have been sent to them by SEZ Customs. But no action/attempt appears to have been taken in this regard/direction - Once it is seen/proved that the goods have actually been sent/supplied to the SEZ units (equivalent to export), the absence of Bond becomes a technical/procedural infraction without any Revenue Implication whatsoever . In fact, in respect of other ten (10) ARE-1s, where also the goods were sent without the cover of the Bond, but it was found that the goods had actually reached to SEZ Units, the corresponding demands have been dropped. Similar issues came up for consideration in the cases of CCE Vs. Dashion Ltd., 2016 (2) TMI 183 - GUJARAT HIGH COURT and CCE Vs. National Engg. Ind. Ltd., 2016 (5) TMI 12 - RAJASTHAN HIGH COURT and it was decided that substantial benefit cannot be denied because of procedural irregularity. It is deemed appropriate to remand the matter to the ld.Adjudicating Authority to verify the relevant documents and pass a speaking and reasoned denovo order in accordance with law and in view of the principles of natural justice - the Appeal filed by the appellant is allowed by way of remand.
Issues:
- Demand of Central Excise duty on clearances to SEZ Units without payment - Imposition of penalty under Rule 25 of the Central Excise Rules, 2002 - Adjudication of demand and penalty by the Adjudicating Authority - Appeal before the Commissioner (Appeals) and subsequent appeal before the Tribunal Analysis: 1. Demand of Central Excise duty on clearances to SEZ Units without payment: The appellant, a manufacturer of various goods, including Battery and Diesel Operated Fork-Lift Trucks, cleared goods to SEZ Units without payment of Central Excise duty, claiming them as "Export." A show-cause notice was issued alleging non-compliance with Rule 19 regarding execution of Bond or Letter of Undertaking for goods worth Rs.94,46,435 removed to SEZ without proof of export. The Adjudicating Authority confirmed a demand of Rs.2,20,565 in respect of 4 ARE I consignments, dropping the remaining demand of Rs.5,48,108 for 10 ARE I consignments. The Commissioner (Appeals) upheld the demand and penalty of Rs.2,20,565, leading to the appeal before the Tribunal. 2. Imposition of penalty under Rule 25 of the Central Excise Rules, 2002: The penalty under Rule 25 of the Central Excise Rules, 2002 was imposed by the Adjudicating Authority and partially set aside by the Commissioner (Appeals). The appellant contested the penalty of Rs.50,000, leading to the appeal before the Tribunal, which focused on the legality and justification of the penalty imposed. 3. Adjudication of demand and penalty by the Adjudicating Authority: The Adjudicating Authority confirmed the demand and imposed penalties based on non-compliance with Rule 19 and procedural irregularities related to the clearance of goods to SEZ Units without payment of Central Excise duty. The appellant's submissions regarding the receipt and handling of goods by the consignees were considered, but the Authority upheld the demand and penalties, prompting the appeal process. 4. Appeal before the Commissioner (Appeals) and subsequent appeal before the Tribunal: The Commissioner (Appeals) upheld the demand and penalty of Rs.2,20,565 but set aside the penalty of Rs.50,000. The appellant challenged this decision before the Tribunal, presenting arguments related to procedural irregularities, compliance with Notification No.42/2001-CE(NT), and citing precedents such as CCE Vs. Dashion Ltd. and CCE Vs. National Engg. Ind. Ltd. The Tribunal, after considering the submissions and observations, allowed the appeal by way of remand, directing a re-verification of documents and a fresh adjudication by the Adjudicating Authority. This detailed analysis outlines the issues involved in the legal judgment from the Appellate Tribunal CESTAT KOLKATA, covering the demand of Central Excise duty, imposition of penalties, adjudication process, and the subsequent appeals leading to the decision by the Tribunal to remand the matter for further verification and a fresh order.
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