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TMI Blog2015 (8) TMI 738X X X X Extracts X X X X X X X X Extracts X X X X ..... ll intimations of receipt of inputs which are duly assessed by the jurisdictional Central Excise offices. The duty demand with respect to DTA clearance can not be recovered by enforcing B-17 bond executed by the main appellant, as exemption under Notification No. 23/2003-CE is claimed independently by the appellants and returns filed by the appellants were assessed and debonding allowed. - provisions of Section 11A of the Central Excise Act, 1944 will be applicable for demanding duty from the main appellant in case conditions of Notification No. 23/2003-CE are not fulfilled. It is observed from the statements of Director of the main appellant Ms. Neepa Mehta and Shri Darshak R. Shah that none of them ever stated that they were having knowledge that GHCL was availing the benefit of Para 8.3(a) and (b) of the FTP. It is only after being explained by the investigation that they stated that GHCL was availing the benefit of Para 8.3(a) and (b). However, there is a force in the arguments of the learned Advocate that none of the documents received by them from M/s. GHCL indicate anywhere that GHCL was availing the deemed export benefit - No copy of these DFIA licenses was furnished by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2003-CE dated 31.03.2003, issued under Section 5A of the Central Excise Act, 1944 main appellant was clearing goods in DTA by paying duty as prescribed under Serial No. 3 of this notification. That during the period January 2007 to June 2007 appellant was clearing, inter-alia, goods in DTA. That by an amending Notification No. 29/2007-CE dated 06.07.2007 an explanation was added to Notification No. 23/2003-CE to the effect that inputs received by a 100% EOU from other DTA units, who avail deemed exports benefit as per paragraph 8.3 (a) and (b) of the Foreign Trade Policy (FTP), were to be treated as imported goods. That by virtue of this amendment effective from 06.07.2007 even locally procured raw materials were to be treated as imported goods if suppliers have received deemed export benefits for such supply under Para 8.3 (a) and (b) of the FTP. That since the documents on which inputs were received remained the same, main appellant continued to avail the benefit of exemption as per Serial No. 3 of the Notification No. 23/2003-CE. That appellant continued to file intimations with the department on receipt of each consignment alongwith copies of invoices and AR 3As issued by the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Authority has not appreciated the submissions made by the appellant and confirmed the demand and imposed penalties based on the corrigendum issued. Learned Advocate argued that DFIA License could also be allowed under paragraphs 8.4.2, 8.4.3, 8.4.4 (iv) and (v) etc. of the FTP and not only under Para 8.3 (a) and (b). That in the documents received from M/s GHCL Limited (GHCL) only DFIA file number and invoice particular were mentioned which does not give any inclination of Para 8.3 (a) and (b) benefit being availed by the suppliers and that documents have remained same before and after the date (06.07.2007) of amendment in Notification No. 23/2003-CE. It was the case of the Learned Advocate, that when documents were not giving any indication of Para 8.3 (a) and (b) of FTP then there can not be any intention to evade payment of duty on the part of the appellants as they had no way to know whether suppliers of raw material has availed Para 8.3 and (b) benefits. It was also argued that accordingly extended period of limitation can not be made applicable. Learned Advocate made the bench go through the B-17 bonds executed by the main appellant and argued that execution of general B-17 b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 08.01.2013. 3.1 Regarding issue of corrigendum learned AR argued that corrigendum was issued only on account of changes in rates of duty with respect to Serial No. 2 of table to Notification No. 23/2003-CE during the demand period and was only arithmetical corrections without changing the basis of the show cause notice. He relied upon the following case laws in support of his arguments:- (i) Best and Co. vs. CC, New Delhi. - [2009 (239) ELT 294 (Tri.-Delhi)]. (ii) CCE, Cus and S.T. BBSR-I vs. Konark Industries. [2011 270) ELT 671 (Tri.-Kolkata)]. (iii)) Sara Services and Engineer Pvt. Limited vs. CCE, Meerut-I. - [2010 (254) ELT 486 (Tri.-Delhi)]. 3.2 On the issue of time barred nature of demand, it was argued by the learned Authorised Representative that extended period is invokable as appellant has accepted the duty liability initially worked out and admitted that supplier M/s. GHCL was availing export benefit under Para 8.3(a) and (b) of Foreign Trade Policy. It was his case that demand is not time barred for which learned AR relied upon the following case laws:- (i) Novapan India Limited vs. CCE Cus, Hyderabad [1994 (73) ELT 769 (SC)] (ii) Saraswati St ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ds by a 100% EOU. Thus, M/s. MSPL is liable to pay Basic Customs duty at the rate of 2.5% up to 28.02.2008 and subsequently, w.e.f. 01.3.2008, they were liable to pay Basic Customs Duty @ 5% along with other duties at full tariff rate on DTA sale of their various finished goods. However, M/s. MSPL had paid duty i.e. equal to excise duty as per Serial No. 3 of the table of the aforesaid notification, thereby M/s. MSPL had short paid duty on DTA sale of their finished goods. In the remaining part of the corrigendum, it is proposed that for the words instead of paying an amount equal to 50% of duty leviable under Section 3 of the Central Excise Act, as per Serial No. 2 of the said Notification in the original show cause notice the words instead of paying Central Excise duty leviable under Section 3 of the Central Excise Act, as per Serial No. 2 of the said Notification shall be substituted. However, in Para 2(d) of the corrigendum dated 18.6.2012 the words alongwith other duties at full tariff rate on DTA sale of their finished goods is also added. These words have added altogether new parameter by the investigation through the corrigendum dated 18.6.2012 which was not the subject ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 03 in respect of advance DTA sales to be effected by them in terms of the permission granted by the Development Commissioner as early as in 2004 itself. Therefore, the respondent cannot be, said to have withheld any information from the department. The respondent s plea that they were entitled for the benefit of exemption under Notification 23/2003 under the belief that they were entitled for benefit of such Notification cannot be said to be a mis-declaration as held by the Hon ble Apex Court in Northern Plastics Ltd. v. Collector of Customs Central Excise - AIR 1998 SC 2371 = 1998 (101) E.L.T. 549 (S.C.). If the department felt that the respondent was not entitled to such exemption, they should have issued the show cause notice within the period stipulated under Section 11A. Revenue s reliance on the decision of the Tribunal in the case of Endress + Hauser Flowtec (I) Pvt. Ltd. (supra) does not come to their rescue for the reason that B-17 bonds are executed not only by the 100% EOUs but also units in the DTA. If Section 11A is applicable in respect of units in DTA who have executed B-17 bonds before the department, the same logic would apply in respect of 100% EOUs as well. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es by the appellant when the same is issued under Section 5A(1) of the Central Excise Act, 1944. Main appellant has been filing duty payment returns and all intimations of receipt of inputs which are duly assessed by the jurisdictional Central Excise offices. The duty demand with respect to DTA clearance can not be recovered by enforcing B-17 bond executed by the main appellant, as exemption under Notification No. 23/2003-CE is claimed independently by the appellants and returns filed by the appellants were assessed and debonding allowed. Accordingly, we hold that provisions of Section 11A of the Central Excise Act, 1944 will be applicable for demanding duty from the main appellant in case conditions of Notification No. 23/2003-CE are not fulfilled. 7. Having held that provisions of Section 11A will be applicable in these proceedings it has to be decided whether extended period is invokable as per issue framed at Para 4(iii) above. Adjudicating authority has upheld invocation of extended period on the grounds that appellants have never disclosed to the department that supplier GHCL was taking deemed export benefit under Para 8.3(a) and (b) and that it was the responsibility of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... licenses. In view of the above, extended period of five years can not be invoked against the main appellant under proviso to Section 11A of the Central Excise Act, 1944 as there is no evidence of prior knowledge and suppression with intention to evade duty on the part of the appellants. 8. Regarding issue at Para 4(iv) above, learned AR argued that on merits appellants did not agitate the issue before the adjudicating authority. On a plain reading of Para 43 of OIO dated 08.1.2013 passed by the Adjudicating authority it is observed that it clearly convey that appellant has not contested their disentitlement to exemption under Serial No. 3 of Notification No. 23/2003-CE. In the statements of the Directors, it is stated that after having understood the aforesaid Notification we say that DTA supplies were received under Para 8.3(a) and (b) as per endorsement made by GHCL on invoices. As already observed actual inspection of some of these invoices does not indicate that supplier availing deemed export benefit of paras 8.3(a) and (b) of FTP. Paras 19.1 and 19.2 of OIO dated 08.1.2013, contained in reply of the appellant to show cause notice are relevant and reproduced below:- 19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r, the argument taken by the appellants that DFIA licenses could also be issued under paragraphs 8.4.2, 8.4.3, 8.4.4 (iv) and (v) before this Bench, was not taken up before the adjudicating authority. 9. Regarding issue at Para 4(v) above, as regards imposition of penalties upon the appellants, it is observed for the reasons recorded above that Revenue is not able to bring any evidence on record that appellants were aware of GHCL taking deemed export benefits under paragraph 8.3(a) and (b) of the FTP, therefore, extended period is not applicable and no penalties are imposable upon the appellant. 10. In the light of our observations made in Para 5 above, corrigendum dated 18.6.2012 does change the very basis of the duties calculated in the original show cause notice by also suggesting calculation of other duties at tariff rates. As the corrigendum dated 18.6.2012 has been issued after a period of one year from the relevant date and is accordingly held to be time barred. However, the original show cause notice is issued on 14.12.2011 and the period of demand is 06.7.2007 to April 2011, therefore, the entire period is not time barred. For this matter, the case will be required t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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