Case Law Details
K.H. Leather Industries Private Limited Vs Commissioner of GST and Central Excise (CESTAT Chennai)
Introduction: The case of K.H. Leather Industries Private Limited vs. Commissioner of GST and Central Excise, adjudicated by CESTAT Chennai, delves into the exemption of customs duty on goods not received by the importer. The tribunal’s ruling highlights the significance of accurate invoicing and the implications of clerical errors in customs documentation.
Detailed Analysis: The appellant, an Export Oriented Unit (EOU) engaged in the manufacturing of leather shoes, held Central Excise registration and a Customs Private Bonded warehouse license. This enabled them to procure duty-free imported and indigenous materials for their export-oriented production. Despite complying with procedural requirements and possessing pre-authorized certificates for duty-free import, discrepancies arose concerning the quantity of goods received.
Upon physical verification, the appellant discovered a substantial shortfall in the quantity of rubber top pieces received compared to what was declared in the supplier’s invoice and the corresponding bill of entry. The discrepancy, attributed to a clerical error by the supplier, led to the imposition of a demand for customs duty by the jurisdictional Central Excise authority.
However, the appellant promptly notified the authorities of the shortfall and sought rectification by providing revised invoices from the supplier, which corroborated the actual quantity received. Despite these efforts to rectify the error, the Department issued a Show Cause Notice demanding customs duty and initiated penal proceedings.
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