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TMI Blog2017 (3) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... them to the department. In such circumstances, it has to be presumed that no such merchant exporters existed at their declared addresses and the bonds executed by such merchant exporters have ceased legality to be a valid document. In the absence of valid bond from the merchant exporters, the liability for payment of excise duty reverses back to the original manufacturer who manufactured the goods i.e. the respondent in the present case. Manufacturer is required to pay Demand of duty with interest and penalty. X X X X Extracts X X X X X X X X Extracts X X X X ..... t was cleared under Central Excise Invoice No. 08 dated 15.05.2001 purportedly by Truck No. MP 04A 1867. (iii) ARE I No. 02/01-02 dated 04.01.2002 for export of 4000000 Nos of JET brand cigarettes valued at ₹ 6,15,053/-and involving Central Excise duty of ₹ 58,00,000/- for export to M/s. Sunrise General Trading LLC, Ajman through M/s. United Enterprises, Mumbai. This consignment was cleared under Central Excise Invoice No. 56 date 08.01.2002 purportedly by truck No. MP 09 KB 2077 3. In the light of investigation as above, Show Cause Notice was issued proposing for recovery of duty payable to the extent of ₹ 1,20,47,600/- on the goods allegedly diverted in the local market in the guise of export. After the due process of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ordingly, his submission is that the demand of excise duty may be confirmed on the respondent. 6. Ld. Counsel for the respondent strongly opposed this plea. He brought to our notice the CBEC instructions issued vide Circular dated 26.12.1994 which deals with the procedure for export of goods without payment of excise duty under bond. His submission is that, in cases where export is proposed through merchant exporters, the bond needs to be executed by the merchant exporters and on the basis of the above bond, the goods will be cleared without payment of duty from the factory. On receipt of proof of export, the bond shall be closed. His submission is that once the merchant exporter have executed the bond and the same stands accepted and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rchant exporters have given fake proof of exports. He admitted that he came to know about the shipping bills being fake but could not do anything against the merchant exporters as they were not traceable. All this fairly indicate the fact that fraud has been committed and the goods cleared from the factory for the purpose of export were never ultimately exported. Such being the case, the duty due on such goods is required to be paid; but the dispute is hinging on who is liable to pay the excise duty. In normal course, the excise law mandates that the goods are liable for payment of excise duty at the time of clearance from the factory after manufacture. The picture becomes hazier when we consider the bonds executed by the merchant exporters ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent persons who were found to be non-existent at the bogus addresses given to the banks. The fact that the respondent does not appear to have raised any doubt or any enquiry regarding such mode of payment, leads us to doubt the bonafides of the respondent.
9. In the light of the above observation, the impugned order is modified and we uphold the demand of excise duty amounting to ₹ 1,20,47,600/- on the respondent. Further, the respondent will also be liable for payment of appropriate interest on the above duty as well as liable for penalty of equal amount under section 11AC of the Central Excise Act, 1944.
10. The appeal is partly allowed in the above terms.
[Pronounced in the open Court on 13/01/2017) X X X X Extracts X X X X X X X X Extracts X X X X
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