2023 (9) TMI 710 - AT - Central Excise

Short payment of duty in respect of the goods cleared to Nepal, by invoking the proviso to Section 11A of the Central Excise Act, 1944 - Rule 8 and Rule 18 of the Central Excise Rules read with the N/N. 40/2001-CE(NT) dated June 26, 2001 and Notification No. 20/2004-CE (NT) dated September 6, 2004, as amended - HELD THAT - The Appellant exported lubricant oil to Nepal. They exported their own manufactured goods as well as traded goods procured from other manufacturers on payment of duty. So far as manufactured goods exported to Nepal was concerned, the Appellant paid duty by raising debit in PLA or Cenvat Account whereas in respect of the traded goods exported to Nepal the Appellant debited the duty as well as quantity in the RG-23D. The duty demanded has been confirmed on the allegation that the duty paid nature of the traded goods has not been established. In respect of the traded goods exported, we observe that the Appellant has prepared corresponding dealers invoices under Rule 11, which were also signed by the Superintendent, before export. The Dealers Invoice provided details of manufacturer s Invoice No. and date and the total quantity covered in such Invoice and proportional duty paid on the quantity exported to Nepal. An account in RG23-D was maintained for duty paid goods - the Appellant were following the procedures and formalities required to be followed by a registered dealer for storing of duty paid goods. The appellant issued cenvatable invoices with cross reference of invoices of manufacturers of the subject goods and filed quarterly returns under the Rule 9(8) of the said Rules. These documents clearly establish the duty paid nature of the traded goods which were exported to Nepal. Thus, the department cannot again demand duty from the Appellant for the traded goods exported, as duty has already been paid by the concerned manufacturers at the time of clearance of those goods - the demands of duty, interest and imposition of penalty on the Appellant in the impugned order are not sustainable. The impugned order is set aside - appeal allowed.

Summary

Issues involved:
The issues involved in this case include duty demand, interest, and penalty imposed on the Appellant in relation to goods exported to Nepal, as well as the compliance with provisions of the Central Excise Act, 1944 and Central Excise Rules, 2002.

Duty Demand and Compliance:
The Appellant, a lubricant plant in West Bengal, exported lubricating oils and grease to Nepal during a specific period. They followed the required procedures for storing duty paid goods, issued appropriate invoices, and maintained necessary accounts. The dispute arose when a Show Cause Notice alleged a duty shortfall of Rs. 21,12,899, which was confirmed in the adjudication order. However, the Appellant argued that they exported duty paid traded goods in accordance with relevant notifications and rules. They maintained that the duty paid nature of the goods was evident through their documentation and procedures. The Tribunal observed that the Appellant had indeed followed all required procedures for exporting duty paid goods, and the duty had already been paid by the manufacturers at the time of clearance. Therefore, the demands of duty, interest, and penalty were deemed unsustainable, leading to the appeal being allowed.

Legal Compliance and Documentation:
The Tribunal noted that the Appellant exported both self-manufactured goods and traded goods to Nepal. While duty for self-manufactured goods was paid through specific accounts, traded goods' duty was debited accordingly. The impugned order raised concerns about the establishment of duty paid nature for traded goods. However, the Appellant had prepared all necessary invoices, including dealers' invoices under Rule 11, signed by the Superintendent, which detailed the duty paid on the quantity exported to Nepal. Additionally, the Appellant maintained an account for duty paid goods, filed required returns, and issued cenvatable invoices with cross-references to manufacturers' invoices. These documents and procedures demonstrated the duty paid nature of the traded goods exported to Nepal, leading the Tribunal to set aside the impugned order and allow the appeal.

Separate Judgment by Judges:
The judgment was delivered by Hon'ble Mr. Ashok Jindal, Member (Judicial), and Hon'ble Mr. K. Anpazhakan, Member (Technical).