Velji P & Sons Vs C.C.E. & S.T. (CESTAT Ahmedabad)
The case of the department is that the appellant M/s. Rawmin Mining and Industries Pvt. Ltd. is 100% export oriented unit has cleared 444903.645 MTs of their final product namely Beneficiated Bauxite and stored at the plot allotted to their custom house agent and shipping agent M/s. Velji P & Sons near Porbandar Port. In respect of such clearance no document such as export document, excise invoice or ARE- 1 was issued therefore the department contended that the excisable goods were cleared without payment of duty and without issuing any documents which is liable to confiscation and also liable to excise duty. Accordingly, the Adjudicating Authority confiscated such goods and demanded excise duty and imposed penalty on all the appellants. The Commissioner (Appeals), in appeals filed before him upheld Order-In-Original except reducing the penalty in respect of appellant Shri Bhavin Hariharbhai Thanki and M/s. Velji P & Sons. Being aggrieved by the said Order-In-Appeal the appellant filed the present appeal.
CESTAT find that there is no dispute in the facts of the case that M/s. Rawmin Mining and Industries Pvt. Ltd have cleared their excisable goods outside the factory without payment of duty and without preparing any documents. Therefore, there is clear violation of the Central Excise Rules and procedure. The appellants’ main defence is that the goods were meant for export and subsequently the same have been exported, therefore, no mala fide intention with intent to evade payment of duty. Even if this fact is considered but the violation of the provision is clearly exists that though excisable goods from the factory cannot be cleared without payment of duty and without issuing the invoices , ARE-1 if it is meant for export. Therefore, the goods were rightly confiscated. However, the appellants’ claim is that the goods which were confiscated have been finally exported, on such goods excise duty is not chargeable but in this case the subsequent event of export of goods has not been considered. Accordingly in my considered view the matters needs to be re-adjudicated after ascertaining facts about the disposal of the goods whether the same were cleared in DTA or for export.
Hence the impugned order is set aside, the matters are remanded to the Adjudicating Authority for passing a fresh order
FULL TEXT OF THE CESTAT AHMEDABAD ORDER
These appeals are directed against the Order- In- Appeal No OIA-06- 08/2012-BVR-/COMMR-A-/RBT/RAJ dated13.02.2012 passed by the Commissioner (Appeals) Central Excise, Rajkot whereby the Learned Commissioner passed the following order –
“18. In light of the foregoing discussions and findings. I pass the following order
(i) I uphold the impugned order of the Lower Authority as far as it relates to
a) confiscation of the detained goods under Rule 25(1)(a) of the Rules along with option to redeem the goods on payment of redemption fine of Rs. 5,00,000/-
b) confirmation and recovery of Central Excise duty amounting to Rs.18,20,387/- under proviso to section 11A of the Act along with appropriate interest under section 11AB of the Act
c) imposition of penalty of Rs. 18,20,387/- under section 11AC of The Act upon M/s Rawmin.
d) imposition of penalty of Rs. 5000/-upon M/s Rawmin under Rule 27 of the Rules;
(ii) The penalty imposed upon Shri. Bhavin under Rule 26 of the Rules is reduced to Rs. 5,00,000/-
(iii) The penalty imposed upon M/s. Velji under Rule 26 of the Rules is reduced to Rs. 5,00,000/-“
1.2 The case of the department is that the appellant M/s. Rawmin Mining and Industries Pvt. Ltd. is 100% export oriented unit has cleared 444903.645 MTs of their final product namely Beneficiated Bauxite and stored at the plot allotted to their custom house agent and shipping agent M/s. Velji P & Sons near Porbandar Port. In respect of such clearance no document such as export document, excise invoice or ARE- 1 was issued therefore the department contended that the excisable goods were cleared without payment of duty and without issuing any documents which is liable to confiscation and also liable to excise duty. Accordingly, the Adjudicating Authority confiscated such goods and demanded excise duty and imposed penalty on all the appellants. The Commissioner (Appeals), in appeals filed before him upheld Order-In-Original except reducing the penalty in respect of appellant Shri Bhavin Hariharbhai Thanki and M/s. Velji P & Sons. Being aggrieved by the said Order-In-Appeal the appellant filed the present appeal.
2. Shri Sudhnashu Bissa, Learned Counsel appearing on behalf of the appellant submits that the demand of excise duty is unlawful and unsustainable as the goods were stored at the plot in the port area and because the appellants were anticipating export order for the said quantity of goods. The goods were not meant for clearance in the DTA and they were infact never diverted to DTA unit. He submits that the director of the appellant M/s Rawmin Mining and Industries Pvt. Ltd clearly stated that the goods is for the export purpose and the same had been cleared during 23.05.2007 to 30.09.2008, the same were shown in Annexure 77 daily stock register of the appellant company. The goods were admittedly found stored at the plot near Porbandar Port. There is no dispute about the fact that the goods were cleared from the factory to the port area for ultimately being exported and never meant to be diverted or sold in the local market. Accordingly, the demand of Central Excise Duty of Rs. 18,20,387/- deserves to be set aside and penalties on all the appellants are also not sustainable.
3. Shri Vijay G. Iyengar, Learned Superintendent (AR), appearing on behalf of the Revenue reiterates the finding of the impugned order.
4. I have carefully considered the submission made by both side and perused the records. I find that there is no dispute in the facts of the case that M/s. Rawmin Mining and Industries Pvt. Ltd have cleared their excisable goods outside the factory without payment of duty and without preparing any documents. Therefore, there is clear violation of the Central Excise Rules and procedure. The appellants’ main defence is that the goods were meant for export and subsequently the same have been exported, therefore, no mala fide intention with intent to evade payment of duty. Even if this fact is considered but the violation of the provision is clearly exists that though excisable goods from the factory cannot be cleared without payment of duty and without issuing the invoices , ARE-1 if it is meant for export. Therefore, the goods were rightly confiscated. However, the appellants’ claim is that the goods which were confiscated have been finally exported, on such goods excise duty is not chargeable but in this case the subsequent event of export of goods has not been considered. Accordingly in my considered vie w the matters needs to be re-adjudicated after ascertaining facts about the disposal of the goods whether the same were cleared in DTA or for export.
5. Hence the impugned order is set aside, the matters are remanded to the Adjudicating Authority for passing a fresh order preferably within a period of two months from the date of this order.
(Pronounced in the open court on 07.03.2023)
