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TMI Blog2023 (5) TMI 431X X X X Extracts X X X X X X X X Extracts X X X X ..... time to time for covering the clearances of the said non duty paid cigarettes received by them from the Appellant. It is not the case of the revenue that these goods were cleared by the appellant in contravention of any of the conditions as per the permission accorded to them by the Commissioner. At the time of granting the permission, Commissioner would have satisfied himself in respect of fulfillment of all the conditions prescribed and in our view he was right in doing so. The conditions for registration under Rule 9 of the Central Excise Rules, 2002 as per Circular No 581/18/2001-CX dated 29.06.2001 was qua the exporter who intended to clear the goods for export from his warehouse. M/s Nuance Group have been granted the license under Section 58 of the Customs Act, 1962 for operating such a bonded warehouse to receive, store and subsequently clear for export the goods so received. Once he fulfilled these conditions the condition of registration under rule 9 of Central Excise Rules, was merely procedural and could not have been reason for the denial of substantial benefit that was claimed by M/s Nuance Group. Once it is admitted that the goods cleared by the appellant were ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oup. 2.2 Alleging that M/s Nuance Group India Pvt. Ltd. was not eligible for exemption from payment of Central Excise Duty, as there was no valid provision in terms of a notification under Section 5A of the Central Excise Act, 1944 or Rule 19 of the Central Excise Rules, 2002, were in force at the relevant time; they had not taken registration under Rule 9 of the Central Excise Rules, 2002, a show cause notice dated 10.05.2010 was issued to appellant, asking them to show cause as to why:- i. The Central Excise duty totally amounting to Rs 4,52,942/- (Rupees Four Lakh Fifty Two Thousand Nine Hundred Forty Two Only) should not be demanded and recovered from them under Section 11 A (1) of the Central Excise Act, 1944 as shown in Annexure A to this notice. ii. Interest should not be recovered from them under the provisions of Section 11 AB of the Central Excise Act, 1944. iii. Penalty should not be imposed on them under Rule 25 of the Central Excise Rules, 2002, for wrongly availing of the benefit of Notification No 46/2001 CE (NT) dated 26.06.2001 and clearing the goods without payment of duty to M/s Nuance Group India Pvt. Ltd. 2.3 Show Cause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of excisable goods meant for sale to international passengers in terms of the Notification No. 7/2013-CE (NT), dated 23.5.2013. Undisputedly, the cigarettes were consigned directly to duty free shop, which was a Customs Bonded Warehouse licensed under Section 58 of the Customs Act, 1962, from where they were sold to the outbound/inbound passengers against payment in foreign currency. Therefore, the impugned cigarettes have been exported by the appellant through merchant exporter namely Nuance Group, and would be covered by the definition of export as per Section 2(19) of the Customs Act, 1962, and hence no duty was required to be paid. [Hotel Ashoka Vs. Asst. CCT 2012 (276) ELT 433 (SC)]. Once, the factum of exports is not under dispute, the substantive benefit of duty exemption cannot be denied even if procedural deficiencies. The permission letter dated 23.12.2008, fixed liability to pay duty on Nuance Group in the event of any lapse and also secured the revenue by requiring Nuance Group to execute Bond. The appellants cannot be held liable for alleged omission on the part of Nuance Group in taking registration under Rule 9 of the Central Excise Rules, 2002 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpliance of conditions of Notification No.45/2001 CE(NT)dated26.06.2001 and the procedure as prescribed under Circular ( No.581/18/2001-Cx dated 29.06.2001. The permission so granted was also subject to following conditions and procedure laid down under Board's letter F.No.24/10/69-CX- IV/S dated 22.06.1970 and on execution of bonds and on furnishing the bank guarantees by M/s Nuance Group. 5. WHEREAS in pursuance of said application/ representation made by M/s Nuance Group and on the basis of said permission given as mentioned in para 4 above, M/s. GPI cleared 2,50,000 Nos of cigarettes cf different brands, without payment of duty during May,2009 to M/s Nuance Group, Bangalore International Airport and said cigarettes were received by M/s Nuance Group for sale by them (Nuance Group) at their Duty Free Shop situated at International Airport at Bangalore. M/s Nuance Group also umished Bond and Bank guarantee for covering the clearances of said non-duty paid ogarettes received by them from M/s GPI. 6. WHEREAS it was found that the cigarettes received by M/s Nuance Group from M/s GPI, without payment of duty, for sale through their Duty Free Shop situated at Internatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty on these cigarette, neither a notification under section 5A of Central Excise Act, 1944 nor under any, notification issued under Rule 19 of Central Excise Rules, 2002 were in force for the relevant period. Moreover, there was no provision in existence deeming such removal as exports. The recipient of said cigarettes M/s. Nuance was also not registered under Rule 9 of Central Excise Rules 2002, warehouse under Section 58 of the Customs Act is authorized to store only imported goods without payment of duty and such warehouse is registered under license by Customs authorities. Normally, imported goods are required to pay Customs duty to Government when they enter India but exemption has been made under Section 58 of Customs Act 1962 to let imported goods remain in India without payment of duty to such warehouse established under Customs Act. Domestic goods can only be cleared without payment of duty to the warehouse registered under Rule 9 of Central Excise Rules, 2002. Furthermore, Notification No. 46/2001CE (NT) dated 26.06.2001, Board's Circular No. 579/16/2001 dated 26.06.2001 and Board's Circular No. 635/26/2002 dated. 18.04.2002 lay down the procedure and other condit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Central Excise Rules, 2002 read with Rule 8 ibid and liable for the recovery of duty under the provisions of Section 11A (1) of Central Excise Act, 1944 and also liable for interest under Section 11AB beside liable for penalty under Rule 25 of the Central Excise Rules, 2002 for wrongly availing benefit of Notification No. 46/2001 CE. (NT) dated 26.06.2001 and clearing the goods without payment of Central Excise duty. 4.5 We are not in position to agree with the findings recorded by the Commissioner (Appeals) simply for the reason that clearance of the impugned goods on 14.05.2009 was made by the Appellant in terms of the proper permission accorded by the Commissioner, to M/s Nuance Group, for receiving the non duty paid goods from the appellant. It is not even the case of the department that these goods were cleared contrary to the permission accorded by the Commissioner. 4.6 At the time of granting the permission, Commissioner would have satisfied himself in respect of fulfillment of all the conditions prescribed and in our view he was right in doing so. The conditions for registration under Rule 9 of the Central Excise Rules, 2002 as per Circular No 581/18/2001-CX dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... even if we agree to the contentions of the Commissioner (Appeals) then also the demand of duty should have been made from M/s Nuance Group, who had executed the Bond and Bank Guarantees for availing the benefit of duty free clearances and not the appellant. In case of Kishore Pumps Ltd., referred to by the Appellants it has been held 3. Since the commitment to complete the export has been given by the merchant-exporter, the department is required to recover the duty from the merchant-exporter in terms of the bond executed before the Maritime Commissioner. I, therefore, hold that there is no case for demanding duty from the appellants and the order of the lower authorities is required to be set aside. Accordingly, I allow the appeal and set aside the orders passed by the lower authorities. 4.8 In case of Tejal Paper Mills referred to by the counsel, following has been held: 3. I have heard both sides and gone through the record. The bare perusal of the impugned order shows that the duty demand has been confirmed against the appellants mainly on the ground that while clearing the goods, the merchant-exporter failed to produce Block Transfer Certificate which was requ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4.2.1 Every exporter registered in the aforesaid manner, shall execute before the Assistant Commissioner of Central Excise or the Deputy Commissioner of Central Excise having jurisdiction over the warehouse a general bond under Rule 19 of the Central Excise (No.2) Rules, 2001 for export of goods from the warehouse in the B-3 Bond (General Security) Form annexed to this Circular at Annexure-I. The exporter availing this scheme shall be required to furnish security equal to 25% of the bond amount. In case any bank guarantees are furnished, it shall be the sole responsibility of the exporter to renew its validity. 4.2.2 A Running Bond Account will be opened in the format specified at Annexure-II. This register shall be maintained by the exporter in the warehouse and shall be made available to the officer-in -charge or officers of Internal Audit for scrutiny and checkings. 5. Warehousing Procedure 5.1 For removal of excisable goods from a factory or any other premise approved by the Commissioner to a warehouse, procedure laid down in Circular No. 579/16/2001-CX dated 26.6.2001 issued under rule 20 of the said rules will be applicable. It is clarified that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ARE-1 No., Invoice No., quantity, value, duty) and clearance for home consumption. They shall produce this Register to the Central Excise Officers in-charge of the warehouse whenever required. Except for stating that M/s Nuance Group, has not obtained registration under Rule 9, it is not even the case put forth by the revenue that other conditions as prescribed at para 4 and 5 were not complied with. It is also not the case that the goods were not received in the ware house and cleared from the ware house in the manner as prescribed for export. 4.10 Once it is admitted that the goods cleared by the appellant were received in the warehouse, the circular says in case of any diversion to domestic tariff area, the duty is required to be paid by the warehouse operator. Para 10 of the Circular reads as follows: 10. Diversion of goods for home-consumption : 10.1 Goods can be diverted for home-consumption from the warehouse with the permission of the jurisdictional Assistant/Deputy Commissioner. The clearance shall be effected on invoice prepared under rule 8 on payment of duty, interest and any other charges on TR-6 Challans and after making necessary entries in the e ..... X X X X Extracts X X X X X X X X Extracts X X X X
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