Madhucon Granites Ltd Vs Commissioner of Central Excise & Service Tax (CESTAT Hyderabad)
The appeal before the CESTAT Hyderabad arose from an Order-in-Original confirming demands of Central Excise duty and Customs duty against a 100% Export Oriented Unit (EOU) engaged in manufacturing granite products. The dispute related to the period from 01.04.2006 to 31.08.2007, during which the appellant had imported and procured goods duty-free under specified exemption notifications.
The department alleged that the appellant had cleared certain goods to the Domestic Tariff Area (DTA) without payment of duty and had also transferred goods to its sister concern, another EOU, without following prescribed procedures. It was further alleged that there were discrepancies in the quantities of goods transferred and received between the units. Based on these findings, the adjudicating authority confirmed demands of Central Excise duty on DTA clearances, on transfers to another EOU, and on goods procured without payment of duty under exemption notifications.
The adjudicating authority also held that the granite products cleared to DTA were not merely rough or dressed stones but processed goods classifiable under Chapter 68, thereby attracting duty. Additionally, it was observed that the appellant had not followed procedural requirements for inter-EOU transfers and had not produced evidence of post facto approval.
