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Broadways Overseas Ltd. Versus CCE. Jalandhar

2017 (12) TMI 382 - CESTAT CHANDIGARH

Clandestine removal - appellant is clearing the goods to the parental unit without payment of duty as the goods are exported by the parental unit - As the parental unit did not mention the goods cleared against ARE-1 No.19 and 20 in the shipping bills, it was alleged that the goods covered under ARE-1 have been cleared clandestinely by the appellant without payment of duty - difference of opinion - majority order. - Held that: - the Revenue's allegations are that the goods in question stand .....

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evidences. The same cannot be made on the basis of assumptions and presumptions. - Revenue, in the present case, has arrived at the above finding on the basis of surmises and conjunctures on the sole ground that ARE-1 Nos.19 & 20 were not mentioned in the shipping bills. It is seen that the appellant had produced evidences on the record to show that the said goods cleared under the said ARE-1 were duly reflected in the invoices issued by the parent Unit for export, though the same were not m .....

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val and as such, the onus to prove the same lies heavily upon them. Admittedly, Revenue has not been able to produce any evidences to that effect - the inadvertent mistake of non-mentioning of ARE-1 Nos. 19 & 20 in the shipping bills cannot lead to any adverse conclusion against the assessee, especially, when such exports stand established by other parallel documents. - Appeal allowed - decided in favor of appellant. - Appeal No. E/1458/2007-Ex(DB) - NTERIM ORDER NO.11/2017, FINAL ORDER NO. .....

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ey were having parental unit under the same name and style located at G.T.Road, Suranussi, Jalandhar and the appellant unit located at Focal Point, Jalandhar. The appellant is manufacturing goods and supplying to their parental unit for export. The appellant is clearing the goods to the parental unit through vide ARE-1 No.19 and 20 dated 5.10.2005 and 6.10.2005 without payment of duty as the goods are exported by the parental unit. As the parental unit did not mention the goods cleared against A .....

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ieved with the said order, the appellant is before us. 3. Learned Counsel for the appellant submits that it is the inadvertent mistake of the parental unit, who failed to mention ARE-1 number on the shipping bills. It is his contention that both units are engaged in the manufacture and export of goods. There is no case found by the Revenue that any goods have been cleared by appellant in domestics market in the guise of ARE-1 certificate. Moreover, the details of the goods cleared for export tro .....

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the charge of clandestine removal is not sustainable. Therefore, he prayed that the impugned order is to be set aside. 4. On the other hand, learned AR appearing on behalf of the Revenue reiterated the findings of the impugned order. 5. Heard the parties and considered the submissions. 6. On careful consideration made by both sides, we find that the sole case of the Revenue is that in the shipping bills, the parental unit did not mention ARE-1 No.19 and 20, therefore, it has been alleged that t .....

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on by the parental unit. If the allegation of the Revenue is to be taken correct, in that circumstance, the Revenue also has failed to produce any evidence for procurement of the goods for export by the parental unit. Moreover, we have seen that on form ARE-1 No.19 and 20, the Superintendent, Shri Rawal Chand has put his signature which is the evidence that the ARE-1 were produced for examination before export of the goods in question. These facts have not been examined by the adjudicating autho .....

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covered in ARE-1 No.19 and 20 have been mentioned in the invoices covered in shipping bills. In that circumstance, the charge of clandestine removal of the goods is not sustainable. 8. Further, we find that there was procedural mistake committed by the parental unit by not mentioning the ARE-1 No.19 and 20 in the shipping bills, in that circumstance, the penalty is imposed under Rule 27 of Central Excise Rules,2002 to the extent of ₹ 5,000/- is confirmed. 8. In view of the above discussio .....

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brother Member (Judicial), I proceed to record a separate order. 2. Admittedly, the appellants did not submit the original and duplicate copies of ARE-1 s No. 19 dt. 05.10.2005 and No. 20 dt. 6.10.2005. They had filed only photocopies of ARE-1 which did not bear the required certification (Pass for Shipment order) of the Custom Authorities at place of export i.e. CFS, Jalandhar. On the back side of these photocopies, it was mentioned that the goods have been actually exported by M/s Broadway Ove .....

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appellant had with the Assistant Commissioner of Custom, CFS, Jalandhar. This is mentioned in the letter dt. 26.06.2006 from the appellants Unit-1 to the ACF, Jalandhar and letter of the ACF, Jalandhar in which he has given his non-acceptance/proof of export is dt. 30.08.2006. This was done after taking into account the letter dt. 07.06.2006 from the appellants and the letter dt. 26.06.2006 from the appellants to the Assistant Commissioner of Central Excise Division as also the report dt. 22.06 .....

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eas Ltd, GT Road, Suranassi, Jalandhar have been duly exported against the Shipping Bill No. detailed in your letter dt. 22.06.2006. Besides, M/s. Broadways Overseas Ltd, GT Road, Suranassi, Jalandhar, there is no other Party on record of the said Shipping Bills. The ARE-1 s filed by M/s Broadways Overseas Ltd, GT Road, Suranassi, Jalandhar stands endorsed to this effect. As regard, the ARE-1 BOl-2/19/2005-06 dt. 05.10.2005 and Bol-2/20/2005-06 dt. 06.10.2005 of M/s. Broadways Overseas Ltd. (Uni .....

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e goods having been manufactured by other than the exporting unit i.e. M/s Broadways Overseas Ltd, G.T. Road, Suranassi, Jalandhar. Accordingly ARE-1 Bol-2/19/05-06 dt. 05.10.2005 and Bol-2/20/05-06 dt. 06.10.2005 could not relate with the exports made under the said Shipping Bills. 5. As rightly observed by the Commissioner, on the said Shipping Bills, M/s Broadway Overseas Ltd. (Unit No. 1), G.T. Road, Suranussi, Jalandhar has been mentioned as manufacturer/exporter and there is no mention of .....

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by the Custom Authorities, none of the two officers have signed and certified that the goods have been exported. In the absence of let export order by the proper officers of customs, the claim of the appellants that goods were exported remains completely un-substantiated. 7. On examination of the export documents related to these two ARE-1 s, the Commissioner has rightly concluded that noticee have neither filed ARE-1 Bol-2/19/05-06 dt. 05.10.2005 and Bol-2/20/05-06 dt. 06.10.2005 at the time o .....

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d goods have not been exported. 8. In Para 12.1 of his order, the Ld. Commissioner has pointed out serious irregularities in the calculation chart in respect of the quantity of the some of the items as vis-vis the export invoices. These have not been satisfactorily rebutted by the appellants in their submissions. Further, the findings of the Ld. Commissioner that the corresponding bank certificate of export and realization the aforesaid export invoices reveal that M/s Broadway Overseas Ltd. (Uni .....

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e shipping bill was that Unit No. 1 is manufacture/exporter. This point has been brought by the Ld. Commissioner in Para 12.2 in his order and the same has not been rebutted. 9. In view of the above, the appellants have failed to substantiate their claim that they had exported the goods cleared from Unit No. 2. 10. The contention of the appellants that there is no domestic market for impugned goods has not been substantiated either before the Commissioner or before this Tribunal 11. Mere Present .....

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act to be done in a particular manner, the act has to be done in that manner alone. Every word of the statute has to be given its due meaning. 12. In the case of State of Jharkhand and Ors Vs. Ambey Cement and Another s 2005 (1) SCC 368 = 2004 (178) ELT 55 SCC, Para 26 of the Judgment, the Court held as under:- It is the cardinal rule of the interpretation that where a statute provides that a particular thing should be done, it should be done in the manner prescribed and not in any other way. 1 .....

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aim. The custom certification of ARE-I proves export of goods but in absence of duly certified copies of ARE-I, rebate sanctioning authority would have no chance to compare these documents with triplicate copy of ARE-I, as stipulated in Notification dated 06.09.2004 and has no material to satisfy itself about correctness of rebate claim in respect of goods allegedly exported. It is said that in case of export of goods, regarding payment of duty under bond, in terms of Rule 19 of Rules, 2002, the .....

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read with procedure in the notification and the Rules, it is clear that the competent authority has chosen not to relax the condition of submission of original and duplicate ARE-I along with rebate claim in any exigency and that is why, no such provision as is available in Chapter 7 read with Rule 19 of Rules, 2002 has been made. 22. It is not in dispute that the procedure laid down with regard to filing of ARE-I before export of goods has not been followed in the present case by petitioner. Th .....

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er that the Notification dated 06.09.2004 has been issued which specifically contemplates filing of ARE-I, verification of goods sought to be exported and sealing of goods after such verification by authorities on the spot, i.e., factory premises etc. In case the procedure of filing ARE-I is given a go-bye, the authorities available on spot shall not be able to verify that the goods sought to be exported are same, the description whereof has been mentioned in the vouchers or not. The objective i .....

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The principle was recognized in Nazir Ahmad Vs. King-Emperor AIR 1936 PC 253 and, thereafter it has been reiterated and followed consistently by the Apex Court in a catena of judgements, which we do not propose to refer all but would like to refer a few recent one. The principles laid down in Para 23 and 24 of the above judgment are directly applicable to the present case. 14. The appellant s contention that Revenue should explain from where goods procured and exported by parental unit came is e .....

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leared from the factory, but were not exported, the Commissioner s conclusion that goods have been diverted to DTA is unexceptionable. As such, there is no infirmity in the order of the ld. Commissioner and the same is sustained. Mr.Ashok Jindal, Member (Judicial) Devender Singh Member (Technical) As there are contrary views and difference of opinion between the Members, the point of difference of opinion are framed as under: POINTS OF DIFFRENCE (a) Whether in the facts and circumstances, the Me .....

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:- (a) Whether in the facts and circumstances, the Member (Judicial) is correct in holding that duty cannot be demanded and consequently penalty under Rule 25 of Central Excise Rules, 2002 read with section 11AC of the Central Excise Act, 1944, is not imposable on the appellant; or the Member (Technical) is correct in holding that there is no merit in the appeal and the same is required to be dismissed. 2. As the facts of the case already stand narrated in the order proposed by learned brother M .....

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the assessee's stand that non-mentioning of the said ARE-1 's in the shipping bills was on account of an inadvertent mistake of the appellant's parent Unit and there are other evidences on record showing that the said export had actually taken place. He had also gone by the fact that apart from making bald allegation of clandestine clearances, Revenue has not produced any evidence on record to show that the goods have actually not been exported. 3.1 On the other hand, Learned Member .....

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e Shri Sudhir Malhotra for the appellants and Shri Vijay Gupta, AR for the Revenue and after going through the impugned order, I find that the Revenue's allegations are that the goods in question stand clandestinely removed to the domestic market in which case the benefit of non-duty paid clearance for export cannot be extended. For making such allegations, the Revenue has not produced any evidence as to show and establish that the goods were diverted and as to how compensation for the same .....

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the appellant had produced evidences on the record to show that the said goods cleared under the said ARE-1 were duly reflected in the invoices issued by the parent Unit for export, though the same were not mentioned in the shipping bills. The order of learned Member (Technical) is indeed on the procedural technical violations and does not conclude on the basis of any evidences. Admittedly, a particular act is required to be done in a particular manner as provided under the statute but an inadve .....

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lusion against the assessee, especially, when such exports stand established by other parallel documents. Reliance by learned Member (Technical) on the decision of Allahabad High Court in the case of Vee Excel Drugs and Pharmaceuticals Pvt. Ltd., Vs Union of India reported in 2014 (305) E.L. T.150 {All.) may not be appropriate inasmuch as the issue in that case was relatable to the assessee's rebate claim in respect of exported goods. It was in that scenario, the Hon'ble court observed t .....

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