Customs, Excise and Gold Tribunal - Delhi
Carrier Aircon Ltd. vs Commissioner Of Central Excise, New ... on 17 May, 2002
Equivalent citations: 2002(82)ECC562, 2002ECR450(TRI.-DELHI), 2002(144)ELT170(TRI-DEL)
ORDER V.K. Agrawal, Member (T)
1 . The issue involved in this appeal, filed by M/s. Carrier Aircon Ltd., is whether the duty of excise is payable by them in respect of excisable goods manufactured and cleared by them under CT-3 procedure and in respect of which rewarehousing particulars have not been received.
2. Shri R. Krishnan, learned Advocate, submitted that the appellants manufacture air-conditioners which were supplied by them to several hospitals and 100% Export-Oriented Undertakings (EOU) at nil concessional rate of Central Excise duty against CT-2 and CT-3 Certificates issued by various Range Superintendents; that the said Certificates are issued by the buyers' Range Officer against the bonds executed by the buyers for due receipt and accountability of the goods supplied against such Certificates; that the Adjudicating Authority, under Adjudication Order No. 221-C.E./98, dated 17-9-98, demanded duty of excise as the Appellants did not have the proof of rewarehousing; that on appeal, Commissioner (Appeals) under the impugned Order No. HKS (964)/CE/2001, dated 21-11-2001, allowed their appeal in respect of goods cleared to hospitals; that, however, Commissioner (Appeals) confirmed the demand of duty in respect of air-conditioners supplied to 100% E.O.Us on the ground that the appellants were legally bound under Rule 156B as modified by Rule 173N of the Central Excise Rules to ensure the receipt of rewarehousing Certificate, or to pay duty.
2.2. The learned Advocate, further, submitted that in cases of supplies of excisable goods made in pursuance of CT-2 and CT-3 Certificates, the responsibility of the consignor comes to an end with the clearance of the goods from the factory; that this is apparent from Para 1(d) of Notification No. 1/95-C.E., dated 4-1-1995 which provides that the user industry has to execute a bond for the proper accountal of the receipts, storage and utilization of the goods; that Rules 156A and 156B only prescribe the procedures in respect of excisable goods removed from one factory or a warehouse to another; that again Para l(g) of the said notification mentions that the user industry has to follow the procedure contained in Chapter X of the Central Excise Rules, 1944; that it is thus evident that the liability of duty is on the buyer if the goods are not accounted for; that reading the notification as a whole and in view of the facts that buyer has to execute a bond for the proper accountal of the receipt, storage and utilization and has to follow procedure under Chapter X, duty of excise cannot be demanded from them and it has to be demanded only from the buyers. He relied upon the decision of the Tribunal in the case of CCE, Madras v. Madras Radiators & Pressings Ltd. - 1994 (69) E.L.T. 409 (T), wherein it was held as under :
"5. An anachronism of this proceeding is that the central excise authorities can proceed against the concession receiver also thus gaining duty twice on the same goods: not a very attractive proposition. The duty is payable by the concessionaire/applicant who was the buyer of the goods. It is not even explained by the Assistant Collector why no proceedings have been made to recover the duty from the receiving factory. But the danger of double receipt of duty is real, because if the buyer-factory is in another Collectorate, the Assistant Collectors at the dispatching end and at the receiving end may not know of the process that may be initiated by either of them for recovery of duty. However that may be, the law is clear - if a factory/applicant is allowed to obtain goods on concession under Notifications 74/79-C.E., 75/79-CE. and 167/79-C.E., the responsibility for the duty of the goods so cleared under concession is transferred from the manufacturing factory to the applicant-buyer-factory and this is a very wise provision. The seller would have no control over the disposal of the goods he sells, and this would place him in jeopardy against which one can see little or no remedy or redress."
2.3. Finally, the learned Advocate refers to a Board's Circular No. 87/98, dated 18-11-1998 wherein the Board directed the field staff that the "Procedure prescribed for movement of goods under AR-3A should scrupulously be followed. It may be ensured that Range Officer sends the relevant copy of AR-3A to the Range Officer through registered post and receives the rewarehousing Certificate by post." He thus contended that the primary responsibility of obtaining rewarehousing product is that of the Range Officer and not of the appellants.
3. Countering the arguments, Shri M.P. Singh, learned Departmental Representative, submitted that the excisable goods are exempted from the whole of the duty subject to the conditions specified in the Notification No. 1/95-C.E.; that one of the condition is that the manufacturer of the goods follow the procedure contained in Rules 156A and 156B of the Central Excise Rules as modified by Rule 173N; that Rule 156B very categorically provides that in case the Certificate of rewarehousing is not received back by the consignor within ninety days of the removal of the goods, the consignor shall pay the duty leviable on the consignment; that as such the demand of duty has been rightly confirmed against the appellants as Certificate of reware-housing has not been received; that requirement of Rule 156B has not been complied with by them so far. The learned DR also submitted that the condition to the effect that user industry follows the procedure contained in Chapter X, specified in the notification, does not in any way affect the liability of the appellants under Rule 156B of the Central Excise Rules; that the liability of the Consignee would start only after the receipt of goods by him; that the liability up to the receipt of goods by the consignee rests with the manufacturer and once the goods have been received by the consignee, he is responsible for the accountal and intended use of the excisble goods; that the Adjudicating Authority himself has given the benefit to the appellants wherever they had produced the Certificate of rewarehousing.
4. We have considered the submissions of both the sides. We find substance in the submissions made by the learned Departmental Representative. Notification No. 1/95-CE., exempts excisable goods when brought in connection with the manufacture and packing of articles into a 100% E.O.U. from the whole of the duty of excise and the Additional duty of excise subject to the conditions specified in the notification. The conditions in brief are that the user industry must have been approved by the Board of Approval for 100% E.O.U; such user industry exports out of India 100% or such other percentage as may be fixed; the user industry executes a bond for the proper accountal of the receipt, storage and utilization of goods; the user industry follows the procedure contained in Chapter X of the erstwhile Central Excise Rules and the manufacturer of the goods follows the procedure contained in Rules 156A and 156B of the Rules as modified by Rule 173N of the Central Excise Rules, 1944. Thus, there is no force in the contention of the learned Advocate that they do not have any liability when the goods are cleared against CT-3. The notification specifically casts the responsibility of following the provisions of Rules 156A and 156B as modified by Rule 173N. It is not material that they have not been asked to execute any bond. As per Rule 156A, as modified by Rule 173N, the consignor shall prepare an application for removal of goods (AR-3) in quadruplicate; he shall send original, duplicate and triplicate application along with the consignment to the destination and quadruplicate copy to the Officer-in-charge of the factory; on arrival of the goods at destination, the consignee shall verify the same and send the original application to the officer-in-charge, duplicate to the consignor and retain the triplicate for his record; the officer-in-charge at destination shall countersign the application and send it to the officer-in-charge of the factory of removal. From this procedure it is apparent that the consignor has to receive back the duplicate copy of AR-3 from the consignee after verification of the goods. Once the consignee does not receive back the same, he is liable to pay duty leviable on the consignment as per provisions of Rule 156B as modified by Rule 173N. Rule 156B further, contains the provisions to the effect that if office-in-charge of factory of removal does not receive back the original application with the re-warehousing Certificate or it shows an unexplained shortage, the consignor shall on demand pay the duty leviable. Proviso to Rule 156B(1) makes the legal position further clear as it provides that where duty has been paid and proof of rewarehousing is produced by the consignor, shall be entitled to a refund of duty so paid. In view of such clear provisions in Rules, it cannot be claimed by the appellants that they are not liable to pay duty in case of non-receipt of re-warehousing Certificate. The Circular dated 18-11-98 was issued to prevent fraud as user industry were forging AR-3A indicating re-warehousing of the goods supposedly received and that's why sending of AR 3 by Registered Post has been prescribed. The said circular does not make the Range Officer liable for getting rewarehousing particulars. The decision in Madras Radiators and Pressings Ltd. is not applicable as the facts are different since in the present matter there is a specific condition of following the procedure prescribed under Rule 156A and Rule 156B as modified by Rule 173N. Accordingly, we find no reason to interfere with the impugned Order and reject the appeal.