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TMI Blog2024 (8) TMI 1146X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant by the officers of Internal Audit Group, it was noted that the appellant had procured raw materials like High Impact Polystyrene (HIPS), Hooks, Polypropylene (PP) etc. without payment of duty as per Notification No.22/2003--CE dated 31.03.2003 as amended and Notification No.52/2003--Cus. dated 31.03.2003. The manufactured plastic hangers, sizers were cleared by the appellant to garment manufacturers in Domestic Tariff Area (DTA) without payment of duty as 'deemed exports' under para 6.9 of Foreign Trade Policy. It appeared that the appellant did not follow the conditions of the Notification No.31/2007--CE (NT) dt. 2.8.2007 for supply of the items to the DTA unit. 4. As per Rule 17 (1) of Central Excise Rules, 2002, where any goods are removed from a 100% Export Oriented Unit to DTA, such removal shall be made under an invoice by following the procedures specified in Rule 11 and the duty leviable on such goods shall be paid by utilizing the Cenvat credit or by crediting the duty payable to the account of Central Government in the manner specified in Rule 8 of the said Rules. 5. As per para--3 of the said notification, the EOU shall clear the specified goods to the D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lief that they could clear the goods in the very same manner. The CT--1 certificates are to be issued by the customers of the appellant (exporters).Such customers were not usually registered with the Central Excise Department. Appellant was not able to obtain CT--1 certificates. 7.1 The difficulties faced in furnishing CT--1 certificate was represented by the appellant to the higher authorities including the Prime Minister's office. The case of the appellant was recommended by the Director--General of Federation for Indian Export Organization vide letter dt. 20.10.2014. Based on the representation a fresh Notification No.20/2015 (NT) No.24.9.2015 was issued wherein the requirement to clear the goods on the basis of CT--1 certificate procedure was removed. The period of dispute in these appeals is prior to the said notification. 7.2 The department does not dispute that the hangers have been cleared to DTA units who have exported the goods. The demand of duty has been raised only for the reason that the appellant has not submitted the CT--1 certificate as required under Notification No.31/2007 dt. 2.8.2007. The CBEC in its circular No.703/19/2003--CX dt. 25.3.2003 issued from F.No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... DTA and not exported. 7.7 Though the SCNs have been issued invoking the extended period alleging suppression of facts with intent to evade payment of duty, the only irregularity noted by the department is the procedural irregularity. There is no positive act of suppression established against the appellant. Further, the unit of the appellant was audited by the internal Audit Group in the year 2008 itself. No objection was raised by the Audit group with regard to the clearances effected by the appellant to the DTA exporters and the procedure followed by the appellants. Moreover, the appellant was making representations to higher authorities on this issue of the difficulties faced for complying with the production of CT--1 certificate as most of the domestic DTA garments customers were not registered under the Central Excise Department. All these would go to show that there are no grounds for invoking the extended period. It is submitted that the demand raised invoking the extended period may be set aside. Ld. Counsel prayed that the impugned orders may be set aside. 8. Ld. A.R Shri M. Selvakumar appeared and argued for the Department. The discussions in paras 13 & 14 of OIO No. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The only allegation is that they have not complied with the procedure of removal of goods on the basis of CT--1 certificates. The appellant has explained the difficulty of procuring the CT1 certificate during the disputed period. It is submitted by the Ld. Counsel that most of the exporters, who are garment manufacturers had SSI units and were not registered with the Central Excise Department. For these reasons, the appellant could not get CT--1 certificates. However, the appellant has furnished Form--H which is sufficient to prove that the goods cleared from the factory have been sold to the DTA customers only for the purpose of export. The document in the nature of Form--H establishes that sale of the goods is in the course of transaction of export of goods. 11. The very same issue in respect of clearances of hangers to the domestic exporters and non--production of CT--1 certificates was examined by the Tribunal in the case of Ramani Plastics Pvt. Ltd. (supra). Relevant paras read as under : "4. We find that in appeal No. E/160/2005, the adjudicating authority, after considering the Board's circular, dated 25-7-2002, and Sales Tax H-Form or ST-XXII Form and the Chartered Acco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rm will be accepted as proof of export. In the present case, Revenue has not disputed that the appellant placed sufficient material in the nature of H-Form or ST-XXII Form, Sales Tax Assessment Order as proof of export. There is no dispute that the Hangers were exported with garments by the merchant exporter. Thus, there is substantial compliance of the Board's circular. The Commissioner (Appeals) observed that there is procedural lapse in so far as the goods were not directly exported but through merchant exporter. The Board has clearly clarified that this facility is not available to the supplies made to any other domestic manufacturer who may or may not export its finished products. In the present case, it is observed from the record that the merchant exporter exported the goods which was not disputed at any point of time." 12. The said decision was followed in the case of Vadapalani Press (supra) and Annai Chemicals & Associators (supra). After appreciating the facts and following the above decisions, we are of the considered opinion that the demand of duty, interest and penalties confirmed on the allegation of procedural irregularities cannot sustain and requires to be set as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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