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2016 (3) TMI 567 - CESTAT MUMBAI

2016 (3) TMI 567 - CESTAT MUMBAI - TMI - Damaged goods beyond recovery - partial damage - Export of damaged goods reprocessed - Claim of recovery - demand duty on 11786.30 mtrs of fabrics on the grounds that it was not possible to verify the correctness of the claim that the goods which have been cleared are re-processed goods - benefit of Notification No. 24/2003-CE dated 31.3.2003 denied - Held that:- We find that it is not disputed that the damaged goods were brought back into the factory. Th .....

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aken at face value. The appellants have not only shown the details of clearance of reprocessed materials in export/DTA on payment of duty and Revenue has not challenged that fact. Revenue has only raised the suspicion that the records produced by the appellant are not authenticated. The assertion of the appellant cannot be set aside merely on suspicion. It has not stated by the Revenue at any stage as to what records were required to be produced that the appellant failed to produce. - The fa .....

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510/11 - Dated:- 14-1-2016 - SHRI RAMESH NAIR, MEMBER (JUDICIAL) AND SHRI RAJU, MEMBER (TECHNICAL) For the Petitioner : Shri Anil Balani, Advocate For the Respondent : Shri D.K. Sinha, Assistant Commissioner (AR) ORDER PER: RAJU The appellants are Export Oriented Unit (EOU). In 2003 they cleared the certain consignments of fabrics for purpose of export, which got damaged due to rain and had to be brought back to the factory. They intimated the said fact to the Range Superintendent immediately on .....

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part was cleared on payment of applicable duty in DTA. A demand of duty was raised for the said damaged fabrics asserting that the claim of recovery of fabric was wrong. The original adjudicating authority observed as follows: - I find that the Noticee received raw material under CT-3 without payment of duty under Notification No. 22/2003-CE dated 31.03.2003 for manufacture of goods for export. The said Notification lays down a condition that if the goods so manufactured are not exported, then .....

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ition and were deemed beyond recovery/reprocessing and the Noticee obtained an insurance claim against these goods. In this matter it is pertinent to cite the statement of Shri Pradeep Saxena, Assistant Manager (Excise) of the Noticee which was recorded on 24.12.2007 wherein he has stated that the said goods were unfit for export/use and the same could not be processed or sold. It was also reasoned that with the passage of time the fabric would deteriorate further due to Basterial activities an .....

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e said chemical they could process the entire stock of damaged fabrics to sellable condition. The appellants claimed that they exported 14397 mtrs of the said fabrics during the period November, 2006 to February, 2007 and cleared 2922.4 meters of the fabrics to DTA during May, 2007 on payment of duty. A show-cause notice was issued to the appellants seeking to demand duty on 11786.30 mtrs of fabrics on the grounds that it was not possible to verify the correctness of the claim that the goods whi .....

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e above, demand of ₹ 14,72,663/- was made on 11786.30 mtrs of fabrics during the same as cleared to DTA and benefit of Notification No. 24/2003-CE dated 31.3.2003 was denied. It was also alleged that the condition 3 and 4(A)(iii)(a) of Notification No. 22/2003-CE dated 31.3.2003 was also violated. Demand of duty was confirmed by both the lower authorities on the ground that the goods which were cleared for export but not exported and brought back to the factory and in respect of which the .....

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that the said goods were indeed damaged after clearance from factory for export and were brought back to factory in the year 2003. At the material time, it was felt that there was no method of re-process of the said goods and the said goods were deteriorated with time. However, in year 2006, they learnt about certain chemicals which can be used for processing of such fabrics and could do so simultaneously. He claimed that they had processed the entire lot and cleared the same for export and for .....

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he damaged goods have indeed been cleared in DTA. He argued that Revenue has wrongly discarded the documents produced by the appellants. He relied on the decision of the Larger Bench of the Tribunal in case of Honest Bio-vet Pvt. Ltd. Vs. Commissioner of Central Excise, Ahmedabad-I - 2014 (310) ELT 526 (Tri-LB), wherein it has been held that the goods cleared for export under Bond, which were destroyed before the same can be exported and be treated as having been destroyed before removal only. H .....

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ere found to be unfit in 2003 to become fit on processing in the year 2007. 4. We have considered the rival arguments. We find that it is not disputed that the damaged goods were brought back into the factory. The argument of the Revenue that it is not possible to reprocess the goods in 2007, when the same goods unfit for reprocessing in 2003, is not sustainable in view of the facts that the technology keeps improving and any claim made in 2003 is based on the appellants knowledge at the materi .....

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ssertion of the appellant cannot be set aside merely on suspicion. It has not stated by the Revenue at any stage as to what records were required to be produced that the appellant failed to produce. The appellant s reliance on the decision of the Tribunal in case of Siraj Sons (supra) is of no avail as in view of the decision of Larger Bench in case of Honest Bio-vet (supra), the Tribunal has held as follows: 14. We are of the view that the goods cleared for export under Bond which were destroye .....

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ant is on far superior footing. The appellants have not only brought back the goods but also re-processed and clear the same for export/DTA clearance on payment of duty. The Order-in-Original distinguished the decision of Madhav Marbles (supra) on the grounds that in that case the damaged goods were scraped and abandoned. In the case of Madhav Marbles (supra) the Tribunal has observed as follows: - 3. It is not in dispute that the granite slabs removed from the EOU in November & December 200 .....

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