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2018 (11) TMI 240 - AT - CustomsLevy of export duty - Cow Split Wet Blue Leather - Cow Pickle Leather - benefit of ‘nil’ rate of duty as per Notification No.133/2000-Cus dated 17.10.2000 - it was alleged that there are export of unfinished leather items by mis-declaring the same as finished leather by wrongly claiming the benefit of Notification No.133/2000-Cus dated 17.10.2000. Whether the exported goods were finished (as claimed by the exporter) or were unfinished or partially finished leather (as claimed by the Department)? Held that:- It is pertinent to note that the term ‘Finished Leather’ used in the Notification is to be interpreted in terms of ITC Pubic Notice No.3/ITC(PN)/92-97, dated the 27th May, 1992 in terms of the Explanation appended at the foot of the said Notification - Reference to the relevant ITC Public Notice (supra) reveals that Industrial Leathers are to be considered as finished, subject to certain minimum operations in manufacture which ought to carried out on them. List of the processes specified include Levelling, Fatliquoring, Shaving/snuffing of the grain and other processes specified in the ITC Public Notice. However, from the impugned order, it is seen that the adjudicating authority has not examined the exported goods from the perspective of whether they have been subjected to any or all of these processes. The test reports only confirmed the fact that the goods are permitted for export and that they are in the nature of Cow Split Wet Blue Leather. The test reports do not record what processes have been carried out on the leather which were being exported. The meaning of the term finished leather is required to be considered in terms of what is specified in the ITC Public Notice referred above. The ITC Public Notice lists out a series of several processes which the leather should have been subjected to for considering the same as finished leather. But it is seen that the Adjudicating Authority has made no reference to the ITC Public Notice, nor has he examined whether the exported goods have been subjected to these processes or atleast some of these processes - It is seen that the exported goods have been entered for export, the relevant bills of export have filed, goods examined, even samples drawn and opinion of CLRI taken and finally, allowed for export. In the bills of export benefit of exemption notification has been claimed and the same has been allowed. Before denial of such benefit at the stage of adjudication, the onus is on Revenue to establish that the exported goods had not satisfied the conditions of the notification. In our view, Revenue has failed to discharge such burden - The onus is on Revenue to establish that the conditions of the Notification were not satisfied. In the circumstances of the present case, it is concluded that the Revenue has failed in satisfying the said onus. Consequently, the demand and penal proceedings against M/s. M.N.Roy & Sons as well as its proprietor are set aside. Penalty on the M/s. Indo Foreign (Agents) Pvt. Ltd. under Section 117 of the Customs Act, 1962 - Held that:- M/s. Indo Foreign (Agents) Pvt. Ltd. had filed the bills of entry on the bonafide belief that the goods do not attract export duty. Such documentation was filed on the basis of the export documents handed over to them by the exporter. As such, CHA cannot be held liable for any penalty. The demand for export duty is not sustainable and have been set aside - Appeal allowed - decided in favor of appellant.
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