2009 (4) TMI 148 - AT - Customs

100% EOU non receipt of goods re warehousing certificate authorities below have confirmed the demand on the sole ground that re-warehousing certificate does not stand produced by the consignee - held that - there is enough material on record, to establish the receipt of the goods by the consignee. The provisions of Rule 20 itself provide that in case of non-receipt of the re-warehousing certificate, officer shall secure a satisfactory proof of the goods having been duly received by the consignee - the non-production of re-warehousing certificate cannot be made the basis for confirmation of demand or imposing penalty, especially when there is not an iota of evidence indicating diversion of the goods en-route

Summary

Issues:
1. Non-production of re-warehousing certificate by the consignee.
2. Reliance on letter indicating non-availability of AR-3A in the seized record.
3. Examination of co-lateral evidences to establish receipt of goods by the consignee.
4. Interpretation of Rule 20 and Board's Circular No. 579/16/2001-CX.

Analysis:

1. The case involved the appellant, a 100% EOU engaged in manufacturing texturised yarns, clearing goods to another EOU without the re-warehousing certificate. The issue arose when the consignee failed to produce the certificate, leading to a demand of duty and penalty. The authorities relied on the non-production of the certificate as the basis for confirming the demand.

2. The appellant claimed that efforts were made to obtain the relevant AR-3A seized by the Anti Evasion department but received no response. The Assistant Director confirmed non-availability of the AR-3A in the seized record. However, the appellant argued that the lack of response from the authorities did not conclusively prove non-seizure, especially when other documents and acknowledgments indicated the receipt of goods by the consignee.

3. The appellant presented various co-lateral evidences to establish the receipt of goods by the consignee, including acknowledgments from the consignee, transporter, and Sales Tax Department. These contemporaneous documents were rejected by the Commissioner (Appeals) as an afterthought, emphasizing the requirement of the re-warehousing certificate. The Tribunal highlighted that the production of the certificate should not be the sole factor for denying the benefit if other documents prove receipt.

4. The Tribunal analyzed Rule 20 and Board's Circular to emphasize the importance of ensuring goods' receipt by the consignee. In this case, the appellant's efforts to provide alternative proofs of delivery were deemed satisfactory. The Tribunal concluded that the non-production of the re-warehousing certificate should not be the sole basis for confirming the demand or imposing penalties, especially when substantial evidence indicated the goods' receipt by the consignee.

In conclusion, the Tribunal set aside the impugned order, allowing the appeal and providing consequential relief to the appellant based on the established receipt of goods by the consignee through alternative evidences, despite the non-production of the re-warehousing certificate.