Customs, Excise and Gold Tribunal - Bangalore
La Mansion Granites Ltd. vs Commissioner Of C. Ex. on 10 January, 2003
Equivalent citations: 2003(157)ELT115(TRI-BANG)
ORDER S.S. Sekhon, Member (T)
1. The Commissioner (Appeals) has found as under -
"5. The appellants, a 100% EOU, are the, manufacturers of Polished Granite Slabs and tiles falling under Chapter Sub-heading No. 6807.00 of the Schedule to the Central Excise Tariff Act, 1985. They cleared for export under B1 Bond, the excisable goods viz, Polished Random Granite Slabs of a quantity of 273.420 Sq Mtrs., vide AR 4 No. 29/94-95, dated 8-8-94 valued at Rs. 5,42,410/- and a quantity of 286.610 Sq Mtrs vide AR 4 No. 46/94-95, dated 24-10-94 valued at Rs. 7,89,703/-. The duty involved on the above quantity works out to Rs. 6,66,057/-. They intimated vide their letter No. nil dated 16-8-94 and letter No. nil dated 10-11-94 that their export consignments dispatched vide AR 4 Nos. 29/94-95, dated 8-8-94 and 46/94-95, dated 24-10-94 have met with accidents and the material which was broken into pieces was not exported and was finally brought back in to the factory. Since the goods have not been exported, the appellants are liable to pay duty on the same in terms of the B1 bond executed by them. The appellants have not produced before me any order from the jurisdictional Commissioner, to whom they had applied for the remission from payment of duty on the above two consignments. In the absence of the permission granted by the jurisdictional Commissioner remitting the duty involved, the Deputy Commissioner's order demanding Central Excise duty of Rs. 6,66,057/- on the above two consignments is correct. However, the imposition of penalty of Rs. 60,000/- is not justified in the facts and circumstances of the case. The same is set aside."
and confirmed demand of duty under Rule 9(2) of the Central Excise Rules, 1944. Hence, this appeal.
2. We have considered the submissions made by both sides and find -
(a) In this case, the basic fact is that excisable goods from 100% E.O.U. which were being exported were allegedly damaged in an accident and the proper procedure laid down for bringing them back to the factory has been followed. The demand for duty under Rule 9(2) of the Central Excise Rules, 1944 is therefore, patently wrong, since a demand under Rule 9(2) can be made only if there is a violation of Rule 9(1); in this case there is no violation of Rule 9(1) because the goods were validly taken out for export purposes and because of the accident, they have been brought back into the factory with the permission of the proper officer and are still in the factory premises.
(b) All the formalities pertaining to conveying the information about the accident to the Central Excise Authorities were completed within the stipulated period. The Police complaint lodged in this regard was also mentioned in the appellants' report to the Collector and the copy of the FIR was enclosed. The damaged material was brought back to the factory premises and the same is still available for inspection. The department also accepts the fact of the material being unfit for export since it is not marketable.
(c) In the case of Treasure Tech Electronics Ltd. v. CCE, Delhi-I reported in [2003 (153) E.L.T. 71 (T) = 2002 (53) RLT 900 (CEGAT-Del.)] based upon the decision of SIV Industries Ltd. v. CCE & C reported in [2000 (117) E.L.T. 281 (S.C.) = 2000 (37) RLT 583 (S.C.)] and Board Circular No. 618/9/2002-CX, dated 13-2-2002, a Bench of this Tribunal, held that the appellants are only liable to pay excise duty as per the Central Excise Tariff Act. We find, in view of the Notification No. 125/84-C.E., dated 26-5-1984, the duty will be determined, only at the time of removal of goods from the E.O.U. in terms of the said notification premature demands of duty cannot be sustained.
(d) Imposing penalty under Rule 173Q is not called for in this case, since Rule 173Q is excluded and not applicable to clearances effected by the E.O.U. in terms of Rule 173A(2).
3. In view of our above findings, the duty and penalty imposed are set aside and the appeal is allowed.