Custom, Excise & Service Tax Tribunal
M/S Brintons Carpets Asia Pvt. Ltd vs Commissioner Of Central Excise, ... on 29 March, 2011
IN THE CUSTOMS, EXCISE & SERVICE TAX APPELLATE TRIBUNAL WEST ZONAL BENCH AT MUMBAI COURT NO. I Appeals No. C/685/07, E/1103 & 1104/07 (Arising out of Orders-in-Original No. 7/CX/2007 dated 30.4.2007 and No. 8/CX/2007 dated 8.5.2007 passed by the Commissioner (Adj.) of Central Excise, Pune-III). Appeal No. E/1198/08, (Arising out of Order-in-Original No. 22/CX/2008 dated 29.8.2008 passed by the Commissioner of Central Excise, Pune-III). Appeals No. E/1094/09, C/15 & 16/10, E/51, 52 & 82/10 (Arising out of Orders-in-Appeal No. P-III/VM/178/09 dated 27.8.2009, No. P-III/VM/263-264/09 dated 30.11.2009, No. P-III/VM/265/09 dated 14.12.2009 passed by the Commissioner of Central Excise (Appeals), Pune-III). For approval and signature: Honble Shri P.G. Chacko, Member (Judicial) Honble Shri Sahab Singh, Member (Technical) ======================================================
1. Whether Press Reporters may be allowed to see : No 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 : Yes CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? 3. Whether their Lordships wish to see the fair copy : Seen of the order? 4. Whether order is to be circulated to the Departmental : Yes authorities? ====================================================== M/s Brintons Carpets Asia Pvt. Ltd. Appellants Vs. Commissioner of Central Excise, Pune-III Respondent Appearance: Shri T. Viswanathan with Ms. Laxmi Menon Advocate for Appellants Shri P.K. Agrawal Jt. CDR for Respondent CORAM: SHRI P.G. CHACKO, MEMBER (JUDICIAL) SHRI SAHAB SINGH, MEMBER (TECHNICAL) Date of Hearing: 29.03.2011 Date of Decision: 29.03.2011 ORDER NO. WZB/MUM/2011 Per: P.G. Chacko
The appellant, in all these appeals, is a 100% EOU which procured their raw materials duty-free by way of import as well as from indigenous sources in terms of the relevant exemption Notification. The appellant manufactured their final product (carpets) out of these raw materials and exported a part of the production in discharge of their export obligation and removed the remaining goods to the Domestic Tariff Aria (DTA) on payment of duty of excise as permitted by the Development Commissioner. All the said clearances of carpets to the DTA were made to EPCG licence-holders. Certain disputes arose between the appellant and the department during the material period. One dispute was whether the appropriate amount of duty was paid by the EOU on the DTA clearances. The relevant show-cause notices, which were issued in this context by the department, alleged that the appellant was not entitled to the benefit of concessional rate of duty under the relevant EPCG notification on account of certain conditions thereof not having been complied with. On this basis, demand of differential amount of duty was raised on the appellant and the same came to be confirmed by the adjudicating authority. The Commissioners order impugned in Appeal No. E/1104/07 which demands Central Excise duty of over Rs.2.3 crores from the EOU is in this category. Similarly, the Commissioners order impugned in Appeal No. E/1198/08, demanding duty of over Rs.81 lakhs from the appellant is also in this category. In the same category are the Orders-in-Original involved in Appeal Nos. E/1094/09 and E/82/10, which were passed by the jurisdictional Additional Commissioner of Central Excise. The Additional Commissioners order were sustained by the Commissioner (Appeals) and the latters orders are under challenge in the said appeals E/1094/09 and E/82/10.
2. The second dispute, which arose between the assessee and the Revenue, was whether the benefit of the relevant exemption notification, in terms of which inputs were procured duty-free by way of import or from indigenous sources, was liable to be denied to the EOU on the ground that appropriate duty was not paid on the final product manufactured out of such raw materials and cleared to DTA. In this context, the relevant show-cause notices alleged that the appellant, by not paying appropriate duty of Excise on their DTA clearances, violated the relevant condition of the exemption notification, in terms of which the raw materials were imported or procured from indigenous sources. On this basis, the show-cause notices demanded differential duty on the raw materials imported or indigenously procured by the EOU during the material period. In adjudication of one such show-cause notice, the Commissioner of Customs and Central Excise confirmed demand of Excise duty amounting to Rs.7,22,478/- and demand of Customs duty amounting to Rs.1,91,84,794/- against the appellant and also imposed penalties. These demands of Excise and Customs duties are under challenge, respectively, in Appeals No. E/1103/07 and C/685/07. Other show-cause notices of this category were adjudicated by the jurisdictional Additional Commissioner, who also confirmed the demands of duties of Customs and Central Excise against the assessee and imposed penalties on them. The Additional commissioners orders were challenged before the Commissioner (Appeals) by the assessee but without success. The Appellate Commissioners orders are under challenge in Appeals No. E/52/10, C/16/10, E/51/10 and C/15/10 filed by the assessee.
3. On a perusal of the records, we find that the Additional Commissioner and the Commissioner (Appeals) followed the view taken by the Commissioner (Adj.) in Order-in-Original No. 7/2007 dated 30.4.2007 and Order-in-Original No. 8/2007 dated 8.5.2007. The Additional Commissioner and the Commissioner (Appeals), apparently, did not independently examine the relevant issues. Their orders are wholly based on the view taken by the Commissioner (Adj.). This takes us to the orders passed by the learned Commissioner (Adj.).
4. Before the learned Commissioner (Adj.), the appellant (EOU) submitted inter alia that they complied with the conditions of the EPCG notifications viz. Notifications No. 44/02-Cus and 55/03-Cus, which had stipulated that the importer had to produce EPCG licence issued by DGFT, execute a Bond to the satisfaction of Assistant/Deputy Commissioner having control over the factory and produce installation certificate before the said Assistant/Deputy Commissioner and also produce evidence of fulfillment of export obligation before the Assistant/Deputy Commissioner. The appellant claimed before the Commissioner (Adj.) that all these conditions were fulfilled and, therefore, the benefit of concessional rate of duty under the above notifications was not deniable to them. In Order-in-Original No. 7/2007 dated 30.4.2007, the learned Commissioner recorded the finding that the aforesaid conditions had not been complied with by the unit and, consequently, the benefit of concessional rate of duty claimed by them was denied and the demand of differential duty confirmed. In Order-in-Original No. 22/08 dated 29.8.2008, the learned Commissioner recorded a similar finding and confirmed demand of differential duty against the EOU, after rejecting the documentary evidence produced by the party. This evidence was referred to in paragraph 30 of the Commissioners order, which reads as under: -
During the personal hearing, copies of a few installation certificates signed by the Chartered Engineer were produced and copies of a few letters from the JDGFT relating to M/s EIH Ltd, Delhi were also submitted. But no attempt has been made to link these documents with the original invoices of the EOU. No benefit can therefore be given on account of such documents produced randomly and well beyond the time limit prescribed in the notification.
5. Before us, the learned Counsel for the appellant has also referred to the above documents. He submits that the letters of the Joint DGFT produced by the appellant before the learned Commissioner proved discharge of export obligation by the appellant in relation to the raw materials procured duty-free and that a few installation certificates issued by the Chartered Engineer were also produced in compliance with the relevant condition of the EPCG notification. The Counsel submits that no opportunity was given to the appellant to establish correlation of these documents with the original invoices covering DTA clearances. It is submitted that the learned Commissioner did not make any attempt to scrutinize the documents with reference to the claim of the EOU. In the circumstances, it is suggested that the learned Commissioner be directed to undertake de novo adjudication of the relevant show-cause notices. As the learned Commissioners view was followed by the Additional Commissioner and the Commissioner (Appeals), Counsel submits, the infirmity of the view taken by the learned Commissioner prejudicially affected the appellant.
6. Learned Jt. CDR has also acknowledged the fact that the documents filed by the assessee before the learned Commissioner (Adj.) did not receive the attention they deserved.
7. Both sides have also attempted to raise a substantive issue before us. One of the contentions raised by the Counsel is that, where the EPCG notifications are made applicable to the appellants DTA clearances to EPCG licence-holders, it is for the licence-holders/buyers to comply with the conditions of the notification. The plea of time-bar has also been raised against one of the show-cause notices. We are not inclined to consider this contention at this stage as we have found sufficient reason to remand the cases for de novo adjudication.
8. A few orders of adjudication were passed by the Commissioner and the rest by the Additional Commissioner. In the nature of this case, it is desirable that all the show-cause notices be adjudicated by the Commissioner. We, therefore, set aside the orders of the lower authorities and allow these appeals by way of remand. The learned Commissioner is requested to undertake de novo adjudication of all the show-cause notices and pass a common speaking order on all the issues involved in the case. Needless to say that the documents referred to in paragraoh 30 of the Commissioners Order No. 22/2008 should be carefully examined and the assessee should be given an apportunity to adduce further documentary evidence also if they want to. The adjudicating authority shall also give them a reasonable opportunity of being heard.
9. All the appeals stand allowed by way of remand.
(Dictated and pronounced in Court)
(Sahab Singh) (P.G. Chacko) Member (Technical) Member (Judicial)
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