Custom, Excise & Service Tax Tribunal
M/S Filatex India Ltd vs Commissioners Of Central Excise on 20 March, 2015
In The Customs, Excise & Service Tax Appellate Tribunal
West Zonal Bench At Ahmedabad
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Appeal No : E/1045/2009 Application No : E/Extn/13735/2014
(Arising out of OIA-KRS/117/VAPI/2009 dated 31/03/2009 passed by Commissioners (Appeals) of Central Excise, Customs and Service Tax-VAPI)
M/s Filatex India Ltd : Appellant (s)
Vs
Commissioners of Central Excise,
Customs and Service Tax-VAPI : Respondent (s)
Represented by:
For Appellant (s) : Shri P.Paranjope, Advocate
For Respondent (s): Shri S.K. Shukla, Authorised Representative
For approval and signature:
Mr. P.K. Das, Honble Member (Judicial)
1. Whether Press Reporters may be allowed to see the No
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 No
in any authoritative report or not?
3. Whether their Lordships wish to see the fair copy of Seen
the order?
4. Whether order is to be circulated to the Departmental Yes
authorities?
CORAM:
MR. P.K. DAS, HONBLE MEMBER (JUDICIAL)
Date of Hearing/Decision: 20.03.2015
Order No. A/10696 / 2015 dated 20.03.2015
Per: P.K. Das
The relevant facts of the case, in brief, are that the appellants were engaged in the manufacture of Synthetic Filament Yarn Texturised and non-Texturised classifiable under Chapter 54 of the Schedule to the Central Excise Tariff Act 1985. They removed 13 consignments of Partially Oriented Yarn (POY) to M/s. Enkay Texofood Industries Ltd. (in short the said Company) a 100% EOU, under the cover of 13 Form ARE-3, without payment of duty against CT-3 Certificates issued by the said Company during the period from 03.06.2004 to 13.06.2004. The Central Excise Officers of Directorate General of Central Excise Intelligence (DGCEI) during their investigation on 15.06.2004 to the said Company seized several records. According to the appellant, in view of the seizure of the documents by DGCEI in the said Company, ARE 3s could not be countersigned by the jurisdictional Central Excise Officers of the said Company.
2. A Show Cause Notice dated 17.06.2005 was issued to the appellant proposing demand of duty alongwith interest and to impose penalty on the clearance of Partially Oriented Yarn to the said Company, as they failed to produce warehousing certificates in respect of 13 ARE 3s. The Adjudicating Authority confirmed the demand of duty of Rs. 11,00,444/- alongwith interest and imposed penalty on 10 nos. ARE-3, and dropped the demand of duty of Rs. 4,55,135/- in respect of 3 nos. ARE-3. Commissioner (Appeals) upheld the adjudication order.
3. The Learned Advocate on behalf of the appellant submits that there is no dispute that the goods were received by the said Company as evident from their letter dated 07.10.2004. The Learned Advocate drew the attention of the Bench to the correspondences with the jurisdictional Superintendent of Central Excise to substantiate the goods were received by the M/s. Enkay Texofood Industries Ltd. He submits that when it is established that the goods were received by the said Company, the demand of duty cannot be raised on the appellants. He relied upon the decision of the Tribunal in the case of Skyron Overseas Vs. Commissioner of Central Excise, Surat 2010 (252) E.L.T. 293 (Tri. Ahmd.). He also referred to Rule 20 (3) of Central Excise Rules, 2002. It is further submitted that both the authorities below had not disputed the correspondence. There is no material available that the appellants diverted the goods in the local market.
4. On the other hand, the Learned Authorised Representative for the Revenue reiterates the findings of the Commissioner (Appeals). He submits that the appellant has failed to produce warehousing certificate, as required under Rule, 20 of the Central Excise Rules, 2002. As per Board Circular No. 579/16/2001-CX dated 26.06.2010, the appellant is liable to pay duty if the warehousing certificate is not received within 90 days. The Adjudicating Authority had already dropped the demand, where the appellant produced warehousing certificate. It is also submitted that the DGCEI in their letter stated that the goods were not recorded inbond register of the said Company.
5. After hearing both the sides and on perusal of the records, I find that the appellants cleared the goods under the cover of ARE-3 on the strength of the CT-3 certificates without payment of duty issued by M/s. Enkay Texofood Industries Ltd. The Learned Advocate submits that the said Company issued CT-3 certificates to the appellant following the procedure under Rule 20 of Central Excise Rules, 2002. For the purpose of proper appreciation of the case, the relevant portion of Rule 20 of the Central Excise Rules, 2002, is reproduced below:-
20. Warehousing Provisions (1) The Central Government may by notification, extend the facility of removal of any excisable goods from the factory of production to a warehouse, or from one warehouse to another warehouse without payment of duty.
(2) The facility under sub-rule (1) shall be available subject to such conditions, including penalty and interest, limitations, including limitation with respect to the period for which the goods may remain in the warehouse, and safeguards and procedure, including in the matters relating to dispatch, movement, receipt, accountal and disposal of such goods, as may be specified by the Board.
(3) The responsibility for payment of duty on the goods that are removed from the factory of production to a warehouse or from one warehouse to another warehouse shall be upon the consignee.
(4) If the goods dispatched for warehousing or re-warehousing are not received in the warehouse, the responsibility for payment of duty shall be upon the consignor.
6. By letter dated 07.10.2004, the said Company informed the appellant that the original ARE-3 were seized by the Central Excise Authority during their investigation on 15.06.2004 alongwith several other documents including warehousing register. They could locate photocopies of 3 ARE-3bearing No. 151,187 and 188. It is also stated that they were vigorously taking up the matter with concerned Central Excise Authorities to release the re-warehousing certificate. The relevant portion of the said letter dated 07.10.2004 of the said Company is reproduced below:-
M/S ENKEY TEXOFOOD INDUSTRIES LTD.
M/s. Filatex India Limited Survey No. 274, Demni Road, Dated 07.10.2004 Dadra-396 191 Dear Sirs,
We are in receipt of your letter dated 24/08/2004 and confirm the receipt of material-delivered by you vide 13 invoices mentioned in your letter.
The original ARE-3A have been taken by the Central Excise authorities during their investigation to our organization on 15 June, 2004 alongwith other several documents including warehousing register. We could locate photocopies of 3 ARE-3A bearing No. 151,187 & 188. Which have already been provided to you. We are vigorously taking up the matter with concerned Central Excise authorities to release the re-warehousing certificates i.e. ARE-3A, which will be submitted to you immediately on receipt. By letter dated 18.10.2004, the Superintendent of Central Excise directed the appellant to produce the warehousing certificates. The appellant by letter dated 21.10.2004 informed the jurisdictional Superintendent that the document submitted by them would show that the goods removed from their factory have been received by the said Company. It is also stated that as per Rule 20 (3) of the Central Excise Rules, 2002 if, the goods dispersed from their factory and received in the warehouse, the responsibility for payment of duty shall be made upon the said Company. Even that the purported show cause notice dated 17.06.2005 was issued to the appellant proposing demand of duty against the goods, which were received by the said Company.
7. The Adjudicating Authority modified the demand of duty on the basis of the letter dated 23.07.2008 of the Deputy Director, DGCEI and dropped the demand of duty in respect of ARE-3 No. 151,187 and 188 as available in the seized records. I find that the said Company in their letter dated 07.10.2004 had mentioned detail the references of 13 nos. ARE-3 out of which 3 nos. ARE-3 were mentioned in DGCEI letter dated 23.07.2008. On perusal of the correspondences, it is seen that M/s. Enkay Texofood Industries Ltd. had accepted that the goods were received by them as per letter dated 07.10.2004. The appellant submitted several documents to substantiate their contention that the goods were delivered to the said company. The Adjudicating Authority had not disputed the said correspondences. As per Rule, 20 (3) of the Central Excise Rules, 2002 M/s Enkay Texofood Industries Ltd. 100% EOU admitted the receipt of the goods and therefore, the responsibility for payment of duty casts upon them. On perusal of the impugned order, I find that the DGCEI by letter dated 19.2.2009 & 26.03.2009 informed that the quantity cleared by the appellants by the above mentioned ARE-3 had not been entered in inbond register of the said Company. Thus, it is clearly evident that the said Company had received the goods and it was not entered in inbond register. So, the duty liabilities would be fastened only on M/s. Enkey Texo Food Industries Ltd, not on the appellant.
8. The Tribunal in the case of Skyron Overseas Vs. Commissioner of Central Excise (Surat) allowed the appeal of the assessee, on identical situation. It has been observed that duty demand on failure to furnish re-warehousing certificate for clearance against CT 3 certificates issued by the recipient and responsibility is on the consignor once duplicate copy of ARE-3 received by him and the informed to the Jurisdictional Range Officer. In the present case, it is evident from the records that the Range Officer was informed the clearance of the goods and receipt of the goods by the said Company. It is also noted that there is no material available on record that the goods were diverted in the local market by the appellant. Hence, duty liability cannot be raised on the appellant. The relevant portion of the said decision in the case of Skyron Overseas (supra) is reproduced below:-
I have considered the submissions made by both sides. As rightly pointed out by the learned advocate show cause notice was issued on the ground that consignor unit (appellant) failed to produce the original copy of re-warehousing certificate countersigned by Supdt. According to procedure, AR3A is required to be prepared in quadruplicate. Original, duplicate and triplicate copies of AR3A are sent with goods to the consignee. Consignor has to submit the quadruplicate copy to the Superintendent of Central Excise concerned with the supplier unit. On receipt of goods, consignee shall send original copy to Superintendent in charge of his, duplicate to the supplier and keep triplicate for his record. Jurisdictional range officer incharge of the supplier unit is required to undertake correspondence if he does not receive original copy of AR3A duly endorsed by the range officer incharge of consignor unit and ensure that either goods have been received by the consignee and initiate action for recovery of duty. From the reading of the Rule 20 relating to warehousing provisions and the Boards Circular cited by the learned advocate, it becomes clear that responsibility of the consignor ends once he receives duplicate copy of the AR3A and informs range officer. Once he receives duplicate copy endorsed by consignor his statutory obligation is over unless it is proved that the consignor himself diverted the goods or was responsible for diversion. In the absence of any evidence from the records to show that the consignor diverted and sold the goods in local market to some other person and thereby violated the provisions relating to ware housing warehouse, responsibility for payment of duty cannot be fastened on him merely because range officer failed to do his duties enjoined upon him by the Circular of the Board. In view of the above discussions, I find that the appellant cannot be found fault with for non receipt of original copy of re-warehousing certificate duly countersigned by the range officer and it is the responsibility of Superintendent incharge of the consignor unit. Accordingly, I allow the appeal with consequential relief to the appellants.
9. In view of the above discussions, the impugned order cannot be sustained and it is set-aside. The appeal filed by the appellant is allowed. The application for extension of the stay order is dismissed as infructuous.
(Dictated & Pronounced in Court)
(P.K. Das) Member (Judicial)
Govind.
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