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2023 (5) TMI 431 - AT - Central ExciseRecovery of Central Excise Duty alongwith Interest and penalty - Manufactured Goods cleared to duty free shop at airport claiming benefit of exemption - cigarettes - clearances affected to M/s. Nuance Group without payment of duty - eligibility for benefit of N/N. 46/2001 CE(N.T.) dated 26.06.2001 - cigarettes were consigned directly to duty free shop, which was a Customs Bonded Warehouse licensed under Section 58 of the Customs Act, 1962, from where they were sold to the outbound/inbound passengers against payment in foreign currency. - HELD THAT:- As per the show cause notice it is quite evident that M/s Nuance Group were granted permission to receive the impugned goods without payment of duty from the appellant for being bonded in their bonded ware house licensed under Section 58 of the Customs Act, 1962, for sale through their duty free shops located at International Airport, Bangalore. Para 5, also records that impugned goods were received by M/s Nuance Group in their bonded warehouse. Nuance Group had executed Bond with prescribed Bank Guarantees from time to time for covering the clearances of the said non duty paid cigarettes received by them from the Appellant. It is not the case of the revenue that these goods were cleared by the appellant in contravention of any of the conditions as per the permission accorded to them by the Commissioner. At the time of granting the permission, Commissioner would have satisfied himself in respect of fulfillment of all the conditions prescribed and in our view he was right in doing so. The conditions for registration under Rule 9 of the Central Excise Rules, 2002 as per Circular No 581/18/2001-CX dated 29.06.2001 was qua the exporter who intended to clear the goods for export from his warehouse. M/s Nuance Group have been granted the license under Section 58 of the Customs Act, 1962 for operating such a bonded warehouse to receive, store and subsequently clear for export the goods so received. Once he fulfilled these conditions the condition of registration under rule 9 of Central Excise Rules, was merely procedural and could not have been reason for the denial of substantial benefit that was claimed by M/s Nuance Group. Once it is admitted that the goods cleared by the appellant were received in the warehouse, the circular no. 581/18/2001 says in case of any diversion to domestic tariff area, the duty is required to be paid by the warehouse operator. The impugned order, wherein the demand has been made from the manufacturer of the impugned goods cannot be upheld - appeal allowed.
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