2006 (11) TMI 29 - AT - Customs

Demand and Penalty Export quota to obtain by a sugar manufacture but not able to export any quantity of sugar Not provide evidence in support of export Demand and penalty sustainable

Summary

Issues:
- Failure to export sugar under export quota scheme
- Rejection of proof of export by export agency
- Demand of duty and penalty for non-compliance

Issue 1: Failure to export sugar under export quota scheme
The case involved an appeal against the order confirming the non-export of sugar by the appellant company despite being allotted an export quota under the Sugar Export Promotion Act, 1958. The Ministry of Food, Government of India fixed the quantity to be exported. The company was entitled to clear sugar earmarked for export at a concessional rate of duty, but they failed to export any quantity of sugar or hand it over to the export agency as required by law. The department raised a demand for duty and imposed a penalty for the period 1991-93 due to non-compliance.

Issue 2: Rejection of proof of export by export agency
The original authority and the Commissioner (Appeals) rejected the proof of export provided by the export agency, stating that the agency could only certify the export of sugar handled by them and not any other quantity. The company failed to produce independent evidence of actual export of sugar, leading to the rejection of the export agency's certification. This rejection played a crucial role in the decision-making process regarding the duty demand and penalty imposition.

Issue 3: Demand of duty and penalty for non-compliance
The Commissioner (Appeals) upheld the demand for the differential duty and penalty, citing convincing reasons for invoking the extended period and imposing the penalty. The Commissioner found the reasons for the demand and penalty imposition to be legal and justified. Consequently, the appeal was rejected based on the Commissioner's decision, which was deemed appropriate and legally sound by the Appellate Tribunal CESTAT, Mumbai.

In conclusion, the judgment highlighted the failure of the appellant company to comply with the export quota scheme, the rejection of proof of export by the export agency, and the subsequent demand for duty and penalty for non-compliance. The decision to uphold the Commissioner's order was based on the legal and convincing reasons provided for the duty demand and penalty imposition, leading to the rejection of the appeal by the Appellate Tribunal.