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TMI Blog2010 (2) TMI 1006X X X X Extracts X X X X X X X X Extracts X X X X ..... ods after clearance from the factory under ARE-I were handed over to the transporter M/s. B.L.R. India Ltd. In the meantime, DRI initiated the enquiries against merchant exporter M/s. Sai Sharddha Exim (P) Ltd. and booked against him a case of diversion of the excisable goods to domestic market by substituting the consignment of drugs obtained duty free from the manufacturers by soap stone powder misdeclared as a bulk drug. As a result of the case booked against the merchant exporter, the export consignment cleared by the Respondent was not taken delivery by the merchant exporter and no payment was made by the merchant exporter to the Respondent. The goods cleared by the Respondent were seized by the DRI and subsequently were confiscated vi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r export till the date of payment of duty. 1.2 The Respondent filed an appeal before the Commissioner (Appeals) and the Commissioner (Appeals) vide order-in-appeal dt. 25-1-08 allowed the appeal on the ground that para 2(v) of the Notification No. 42/2001-C.E. (N.T.) read with para 1.1 of chapter 7 part V of the supplementary instructions are applicable only to a case where excisable goods initially cleared under ARE-I for export without payment of duty are not exported for any reason and thereafter on cancellation of the ARE-I, their sale for home consumption is allowed and only in such a situation, the duty alongwith interest as prescribed under para 2(v) of the Notification No. 42/2001-C.E. is required to be paid and that these provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... export under bond without payment of duty under ARE-I are not exported for any reason and thereafter with the permission of the competent authority are diverted for home consumption; that in this case the goods after clearance from the factory for export were not diverted for home consumption, as the merchant exporter did not take delivery, that the goods had been ordered to be confiscated and the same were taken back to the factory on payment of duty as per the order of the Commissioner (Appeals) and after being taken back to the factory, the goods were exported out of India; that since in this case, there was no diversion of the goods for home consumption, the provisions of para 2(v) of the Notification No. 42/2001-C.E. would not be attra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been demanded on the goods diverted for home consumption after clearance of the export, the provisions of interest as per para 2(v)(b) of the Notification No. 42/2001-C.E. would be automatically attracted. In view of this, I hold that the interest on duty at the rate specified in the notification for the period from date of removal till date of payment of duty was chargeable and the same was correctly paid by the Respondent and as such the Commissioner (Appeals) s order permitting the refund of the interest is not correct. In view of the above discussion, the impugned order is set aside and the order-in-original passed by the Asstt. Commissioner is restored. The Revenue s appeal is allowed. (Order dictated in the open Court) - - Tax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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