TaxTMI 
TaxTMI 
2015 (8) TMI 738
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....been imposed upon Shri. Darshak Shah, Director of the main appellant under Rule 26 of the Central Excise Rules, against which Appeal No. E/10426/2013 has been filed. 2. Shri P.M. Dave (Advocate), Shri Paritosh Gupta (Advocate) and Shri Kuntal Parikh (Advocate) appeared on behalf of the appellants. Shri P.M. Dave argued that main appellant was permitted by Development Commission, Kandla Special Economic Zone to work as a 100% EOU for the manufacture of Precipitated Silica. That main appellant has manufactured and exported the goods so manufactured to foreign countries and also a small quantity of such goods were allowed to be cleared and sold in Domestic Tariff Area (DTA) in accordance with the Export-Import Policy. That by a Notification No. 23/2003-CE dated 31.03.2003, issued under Section 5A of the Central Excise Act, 1944 main appellant was clearing goods in DTA by paying duty as prescribed under Serial No. 3 of this notification. That during the period January 2007 to June 2007 appellant was clearing, inter-alia, goods in DTA. That by an amending Notification No. 29/2007-CE dated 06.07.2007 an explanation was added to Notification No. 23/2003-CE to the effect that inputs recei....
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....d staff without raising any objection. That till date it is not established by the Revenue that raw material suppliers have actually availed deemed export benefit Under Para 8.3 (a) and (b) of FTP. That a personal hearing was also held by Adjudicating authority on 09.04.2012 and after holding of hearing, a corrigendum dated 18.06.2012 was issued by the department raising the demand amount to Rs. 4,86,65,605/- as against Rs. 1,33,22,958/- mentioned in the Original Show Cause Notice dated 14.12.2011. That on 23.07.2012 appellant filed further reply to the corrigendum and contested that issuing of corrigendum is not on account of clerical or automatic error but has changed the entire basis of the show cause notice. That Adjudicating Authority has not appreciated the submissions made by the appellant and confirmed the demand and imposed penalties based on the corrigendum issued. Learned Advocate argued that DFIA License could also be allowed under paragraphs 8.4.2, 8.4.3, 8.4.4 (iv) and (v) etc. of the FTP and not only under Para 8.3 (a) and (b). That in the documents received from M/s GHCL Limited (GHCL) only DFIA file number and invoice particular were mentioned which does not give a....
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....a vs. CC, Visakhapatnam. [2007 (210) ELT 150 (Tri.-Bangalore)]. (vii) Kathe Steel Rolling Mills Pvt. Ltd vs. CCE and Cus, Aurangabad. - [2000 (115) ELT 145 (Tribunal)]. (viii) Kishore Hemani vs. CC Mumbai. - [2002 (148) ELT 88 (Tri.-Mumbai)]. 2.3. That on merits as well as time bar appellants have a strong case and that penalties on the appellants are also not attracted as there is no intention to evade duty. 3. Shri. J. Nagori, Additional Commission (AR) appearing on behalf of the Revenue argued that on merits appellants have not agitated the case before he Adjudicating Authority hence the same can not be raised at the appellate Stage. He made the bench go through Para-43 of the order-in-original dated 08.01.2013. 3.1 Regarding issue of corrigendum learned AR argued that corrigendum was issued only on account of changes in rates of duty with respect to Serial No. 2 of table to Notification No. 23/2003-CE during the demand period and was only arithmetical corrections without changing the basis of the show cause notice. He relied upon the following case laws in support of his arguments:- (i) Best and Co. vs. CC, New Delhi. - [2009 (239) ELT 294 (Tri.-Delhi)]. (ii) CCE, Cus an....
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....3/2003-CE rate of duty, as per Serial No. 2 of the table to this exemption, was required to be reduced by 75% for the period 01.3.2006 to 28.02.2006 and by 50% with effect from 01.3.208. These changes proposed in the corrigendum dated 18.6.2012 have been suggested as per paragraph 2(d) of the corrigendum as follow:- "2(d) In view of the above amendments, as per S. No. 2 of the Table of the said exemption Notification No. 23/2003-Central Excise dated 31st March, 2003, the rate of Basic Customs Duty was reduced by 75% from 01.03.2006 to 28.02.2008 and by 50% with effect from 01.3.2008 and whereas other duties are leviable at full tariff rate on DTA sale of finished goods by a 100% EOU. Thus, M/s. MSPL is liable to pay Basic Customs duty at the rate of 2.5% up to 28.02.2008 and subsequently, w.e.f. 01.3.2008, they were liable to pay Basic Customs Duty @ 5% along with other duties at full tariff rate on DTA sale of their various finished goods. However, M/s. MSPL had paid duty i.e. equal to excise duty as per Serial No. 3 of the table of the aforesaid notification, thereby M/s. MSPL had short paid duty on DTA sale of their finished goods." In the remaining part of the corrigendum, it....
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....ad (supra) earlier decided by the same Bench, gave an opinion that Section 28 of the Customs Act, 1962 is the only provision to demand duty if the conditions of a notification are not fulfilled. Still a later case law of CESTAT Mumbai in the case of CCE, Pune vs. Emcure Pharmaceuticals Limited (supra) also distinguished the case law Endress+Hauser Flowtec (I) Pvt. Limited vs. CCE, Aurangabad (supra) by making following observations in Para 5:- "5. We have carefully considered the submissions made by both the sides. From the records it is clearly seen that the respondent had declared to the department that they would be availing the benefit of Notification 23/2003 in respect of advance DTA sales to be effected by them in terms of the permission granted by the Development Commissioner as early as in 2004 itself. Therefore, the respondent cannot be, said to have withheld any information from the department. The respondent s plea that they were entitled for the benefit of exemption under Notification 23/2003 under the belief that they were entitled for benefit of such Notification cannot be said to be a mis-declaration as held by the Hon ble Apex Court in Northern Plastics Ltd. v. Col....
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....the Director General of Foreign Trade, pay duty of excise leviable on such articles under Section 3 of the Central Excise Act, 1944 and shall pay duty of excise leviable on such article under Section 3 of Central Excise Act, 1944 and duty of Customs & Central Excise leviable on the Raw materials/ Component part used in the manufacture of such articles as are not allowed to be sold in India in accordance with the provisions of Exim Policy." No condition so specified in this regard by DGFT has been brought to our notice. As no duty is foregone even Notification No. 23/2003-CE dated 31.3.2003, as amended, does not require execution of a bond for DTA clearances by the appellant when the same is issued under Section 5A(1) of the Central Excise Act, 1944. Main appellant has been filing duty payment returns and all intimations of receipt of inputs which are duly assessed by the jurisdictional Central Excise offices. The duty demand with respect to DTA clearance can not be recovered by enforcing B-17 bond executed by the main appellant, as exemption under Notification No. 23/2003-CE is claimed independently by the appellants and returns filed by the appellants were assessed and debonding ....
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....at GHCL has availed the benefit of Para 8.3(a) and (b) of the FTP. It is observed from the case records that M/s. GHCL Limited vide letter dated 28.11.2011 written to Senior Intelligence Officer, Office of the DGCEI, Navarangpura, Ahmedabad did send copies of two DFIA Licenses No. 0810079587 dated 27.4.2009 and 0810081427 dated 14.07.2009. No copy of these DFIA licenses was furnished by the Revenue before the Bench and also there is no indication whether appellants were shown copies of these DFIA licenses during investigation to the fact that these licenses had endorsements of paragraph 8.3(a) and (b) of Foreign Trade Policy on the face of these DFIA licenses. In view of the above, extended period of five years can not be invoked against the main appellant under proviso to Section 11A of the Central Excise Act, 1944 as there is no evidence of prior knowledge and suppression with intention to evade duty on the part of the appellants. 8. Regarding issue at Para 4(iv) above, learned AR argued that on merits appellants did not agitate the issue before the adjudicating authority. On a plain reading of Para 43 of OIO dated 08.1.2013 passed by the Adjudicating authority it is observed th....
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....escribed underSI.No.2 of the above Notification because they had used raw materials procured in the above manner for manufacture of the finished goods cleared in DTA, and the Revenue has also not established that they had deliberately suppressed certain relevant facts though they knew about the same and that therefore they were guilty of deliberate suppression of facts with an intent to evade payment of Central excise duty on DTA clearances. The larger period of limitation is therefore invoked illegally and without jurisdiction." 8.1 In view of the above, it is not correct to say that appellants have not contested the issue on merits. However, the argument taken by the appellants that DFIA licenses could also be issued under paragraphs 8.4.2, 8.4.3, 8.4.4 (iv) and (v) before this Bench, was not taken up before the adjudicating authority. 9. Regarding issue at Para 4(v) above, as regards imposition of penalties upon the appellants, it is observed for the reasons recorded above that Revenue is not able to bring any evidence on record that appellants were aware of GHCL taking deemed export benefits under paragraph 8.3(a) and (b) of the FTP, therefore, extended period is not applicab....