Custom, Excise & Service Tax Tribunal
Technologies Pvt. Ltd.) vs Cce & St, Noida on 4 June, 2015
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL, PRINCIPAL BENCH NEW DELHI
Date of Hearing/ Decision: 4.6.2015
Excise Appeals Nos.E/1585 and 1584/2006-EX(DB)
[Arising out of common Order-in-Appeal No.58-59/CE/Noida/2006 dated 9.3.2006 passed by the Commissioner of Central Excise (Appeals), Customs & Central Excise, Noida]
M/s. Ginni Non Woven Pvt. Ltd.(earlier known as M/s.Yash
Technologies Pvt. Ltd.) Appellants
Shri N.K. Indoria, Director
Vs.
CCE & ST, Noida Respondent
Appearance:
Rep. by Shri J.M. Sharma, Advocate for the appellants. Rep. by Shri M.S. Negi, DR for the respondent. For approval and signature:
Honble Shri Rakesh Kumar, Member (Technical) Honble Smt. Sulekha Beevi C.S. Member (Judicial) 1 Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?2
Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?3
Whether Their Lordships wish to see the fair copy of the Order?4
Whether Order is to be circulated to the Departmental authorities?
Coram: Honble Shri Rakesh Kumar, Member (Technical) Honble Smt. Sulekha Beevi C.S. Member (Judicial) Final Order No.51985-51986/2015 dated:4.6.2015 Per Rakesh Kumar:
The facts leading to filing of these appeals are, in brief, as under:-
1.1 The appellant company, whose Director is Shri N.K. Indoria was registered under Rule 12 B of the Central Excise Rules, 2002. In terms of Rule 12 B of the Central Excise Rules, 2002, notwithstanding with anything contained in these rules, every person not being an export-oriented unit or a unit located in special economic zone, who gets yarns or fabrics produced or manufactured on his account, on job work basis, shall obtain registeration, maintain accounts, pay duty leviable on such goods and comply with all the relevant provisions of these rules as if he is an assessee. In terms of the CBEC Circular No.795/28/2004 dated 28.07.2004, the person registered under Rule 12 B even though not undertaking any manufacturing activity on his own and not having a factory, should be treated as manufacturer for all practical purposes. The dispute in the present case is for the period from 17.01.2004 to 26.06.2004. During this period, the appellant company not having any factory/manufacturing infrastructure was procuring grey fabrics and getting the same processed though a job worker and the processed fabrics was being exported out of India under bond directly from the premises of the job workers. For this purpose, in the ARE-Is the date and time of the clearance were being filled in by the job worker. There is no dispute regarding the export of the goods out of India and that, the proof of export has been received. The Department, however, is of the view that in terms of the sub-rule (2) of Rule 12 B, a person registered under Rule 12 B could export the goods got manufactured through job worker only on payment of duty. In this regard, the department relies upon the wordings of sub-rule (2) of Rule 12 B, according to which, if the said person desires clearance of excisable goods for home consumption or for exports from the premises of job worker, he shall pay duty on such excisable goods and prepare an invoice, in the manner, referred to in Rules 8 and 11 respectively except for mentioning the date and time of removal of goods on such invoice. The original and duplicate copy of the invoice so prepared shall be sent by him to the job worker from whose premises the excisable goods after completion of job work are intended to be cleared, before the goods are cleared from the premises of the job worker. The job worker shall fill up the particulars of date and time of removal of goods before the clearance of the goods. After such clearance, the job worker shall intimate to the said person, the date and time of clearance of the goods for completion of the particulars by the said person in the duplicate copy of the invoice.. Accordingly, the Department was of the view that in respect of the clearances for export made by the appellant from the job workers premises, the duty would be chargeable.
1.2 The unit of the appellant was visited by the officers on 24.11.2004 and at that time though there was a stock of processed fabrics valued at Rs.5,95,136/-, there were no records. On being asked, the appellant explained that the records had been sent to the Corporate office for computerization. Subsequently, however, 29.11.2004, the records were produced. Since on 24.11.2004 the appellant could not produce any records, the processed fabrics found in stock were seized. The Department was of the view that since these goods were not accounted for in terms of the relevant provisions of the Central Excise Rules, the same would be liable for confiscation.
1.3 In view of the above, a show cause notice was issued for demand of duty amounting to Rs.19,41,761/- in respect of the fabrics cleared for export from the job workers premises during period from 17.1.2004 to 26.06.2004 along with interest on it under Section 11 AC and also for imposition of penalty under Section 11 AC. The same show cause notice also sought confiscation of the seized goods valued at Rs.5,95,136/-.
1.4 The above show cause notice was adjudicated by the Joint Commissioner vide order-in-original dated 8.12.2005 vide which he confirmed the above mentioned duty demand along with interest and imposed penalty of equal amount on the appellant under Section 11 AC of the Central Excise Act read with Section 25 of the Central Excise Act. Besides this, a penalty of Rs.50,000/- was imposed on Shri N.K. Indoria, Director. By the same order, the processed fabrics valued at Rs.5,95,136/- seized from the premises of the appellant were ordered to be confiscated under Rule 25 of the Central Excise Rules with option to be redeemed on the payment of redemption fine of Rs.50,000/-. Against this order of the Commissioner (Appeals), these two appeals have been filed by the appellant and its Director.
2. Heard both the sides.
3. Shri J.M. Sharma, Consultant, ld. Counsel for the appellant, pleaded that during the period of dispute, the appellant, though not having any factory and not directly engaged in the manufacture of any excisable goods and who were getting the grey fabrics procured by them processed on job work basis, was registered in terms of the provisions of Rule 12 B of the Central Excise Rules, that in terms of the Boards Circular No.196/26/84-CX dated 28.07.2004 the appellant was to be treated as manufacturer for all practical purposes, that the appellant during the period of dispute got certain grey fabrics manufactured and got the same processed through job workers and exported directly from the premises of the job workers under Rule 19 of the Central Excise Rules, that the clearances for export had been made under ARE-I which were signed by the appellant, that there is no dispute that the goods have been exported out of India and the proof of export for the goods cleared under ARE-I has been received, that since in terms of the Boards Circular dated 28.07.2004 the appellant registered under Rule 12 B is to be treated as manufacturer and since the goods processed through job worker had been cleared under ARE-I under bond, the provisions of Rule 19 are applicable to the appellants., that the Department demands duty only in terms of the provisions of sub-rule (2) of Rule 12 B of the Central Excise Rules, which mentions that,if the person registered under Rule 12 B of the Central Excise Rules, desires clearance of the excisable goods for home consumption or for export from the premises of the job worker, he shall pay duty on such excisable goods and prepare an invoice, that in this sub-rule (2), there is no prohibition that such a person cannot export the goods through job worker under Rule 19 of the Rules and since that the appellant registered under Rule 12 B was to be treated as a manufacturer, the provisions of Rule 19 would be applicable to him, that when the goods have been exported out of India under bond in terms of the provisions of Rule 19 by following the procedure prescribed under this rule and fulfilling its conditions, the benefit of the duty free clearance cannot be denied. Shri Sharma, therefore, pleaded that duty demand of Rs.19,41,761/- is without any basis and is not sustainable. With regard to confiscation of the goods valued at about Rs.5,95,136/-, Shri Sharma pleaded that the goods had been accounted for in the account being mentioned in terms of Rule 10 of the Central Excise Rules and at the time of the officers visit to their premises, RG-I register had been sent to Head Office for computerization and subsequently, the stock account maintained by the appellant had been produced on 29.11.2004 and that in view of this, the order of confiscation of the goods and imposition of penalty is not correct. He, therefore, pleaded that the impugned order is not sustainable.
4. Shir M.S. Negi, ld. Departmental Representative defended the impugned order by reiterating the findings of the Commissioner (Appeals). He pleaded that in terms of the sub-rule(2) of the Rule 12 B, if the person registered under Rule 12 B of the Central Excise Rules, desires clearance of the excisable goods for home consumption or for export from the premises of the job worker, he shall pay duty on such excisable goods and prepare an invoice. With regard to the confiscation of the goods, Shri Negi pleaded that even though the appellant had subsequently produced the RG-I register on 29.11.2004, it had been maintained only upto August, 2004, which showed that the appellant were not properly maintaining the stock account of the finished goods in terms of the provisions of Rule 10 of the Central Excise Rules. He, therefore, pleaded that there is no infirmity in the impugned order.
5. We have considered the submissions from both the sides and perused the records.
6. The appellant company is a person registered under Rule 12 B of the Central Excise Rules as the same stood during the period of dispute. The appellant did not have any infrastructure for manufacture of any goods and they were procuring the grey fabrics and getting the same processed through independent job works. During the period of dispute, the fabrics got processed on job work basis were exported by the appellant company directly from the job workers premises without payment of duty under Rule 19 of the Central Excise Rules. There is no dispute that the clearance had been affected in ARE-Is duly filled in and signed by them and the proof of export has been received. The only point of dispute is whether in terms of sub-rule (2) of Rule 12 B, the appellant company was liable to pay duty in respect of these goods. The stand of the Department is that in view of the provisions of sub-rule (2) of the Rule 12 B that even if the person registered under Rule 12 B of the Central Excise Rules, desires clearance of the excisable goods for home consumption or for export from the premises of the job worker, he shall pay duty on such excisable goods and prepare an invoice, the appellant will be liable to pay duty. In our view, this stand of the Department is not correct, as in terms of the Boards Circular dated 28.07.2004, the person registered under Rule 12 B, even though not undertaking any manufacturing activity on his own and not having a factory, should be treated as a manufacturer for all practical purposes. In terms of Rule 19 of the Central Excise Rules, any excisable goods may be exported without payment of duty from a factory of the producer or the manufacturer or the warehouse or any other premises, as may be approved by the Commissioner under this Rule. Thus a person whether a manufacturer or a trader can export the goods under bond under Rule 19 from the factory where the same have been manufactured. Since in the present case, there is no dispute that the necessary conditions for export under bond without payment of duty under Rule 19 have been satisfied and the prescribed procedure had been followed, the Departments stand that the duty would be chargeable on the clearance made by the appellant for export from job workers premises is not correct. In view of this, the impugned order upholding the duty demand of Rs.19,41,761/- along with interest and imposing penalty of equal amount on the appellant is not sustainable and has to be set aside.
7. As regards the confiscation of the goods valued at Rs.5,95,136/- for non-accountal of the goods, there is no dispute that while at the time of officers visit to the factory on 24.11.2004, the RG-I register was not there but the same was produced on 29.11.2004. In this regard, while the contention of the ld. Departmental Representative is that register was maintained only upto the August, 2004. The contention of the appellant is that at the time of officers visit to the factory, RG-I register was sent to the Head Office for computerization and when it was produced on 29.11.2004, the same had been updated. Be that as it may, in our view, the imposition of fine of Rs.50,000/- is on a much higher side, when duty involved on the goods is only Rs.38,000/-. In view of this, the redemption fine is reduced to Rs.10,000/- (Rupees Ten Thousand only).
8. As regards, penalty of Rs.50,000/- imposed on Shri N.K. Indoria, Director, the same has been imposed under Rule 26 of the Central Excise Rules, which is attracted on, any person who acquires possession of, or is in any way concerned in transporting, removing, depositing, keeping, concealing, selling or purchasing, or in any other manner, dealing with, any excisable goods which he knows or has reason to believe are liable to confiscation under the Act or these Rules and the penalty imposable is exceeding the duty on such goods or two thousand rupees, whichever is greater. In our view, none of these situations are present in the present case with regard to Shir N.K. Indoria. Hence, the penalty on him under Rule 26 is not sustainable.
8. In view of the above discussion, the duty demand of Rs.19,41,761/- against the appellant company along with interest and imposition of equal amount of penalty and also penalty of Rs.50,000/- imposed on Shri N.K. Indoria, Director under Rule 26 of the Central Excise Rules is set aside. However, while the confiscation of the goods is upheld, the redemption fine in lieu of confiscation of the goods is reduced to Rs.10,000/- (Rupees Ten Thousand only). The appeals stand disposed of as above.
(Rakesh Kumar) Member (Technical) (Sulekha Beevi C.S. ) Member (Judicial) Ckp.
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