Customs, Excise and Gold Tribunal - Ahmedabad
Vikram Enterprises vs Cc on 12 February, 2008
Equivalent citations: 2008(128)ECC262, 2008(154)ECR262(TRI.-AHMEDABAD)
ORDER Archana Wadhwa, Member (J)
1. We have heard Shri J.C. Patel, learned advocate appearing for the appellant and Shri M.M. Mathkar, learned JDR appearing for the Revenue.
2. As per the facts on record, the appellant is a unit located in Kandla Special Economic Zone. They cleared 100% Polyester Fabrics and Polyvinyl Alcohol Gohsenol to another 100% EOU M/s D.D. Trading Co., against the CT-3 certificate provided by the said consignee. Subsequently, re-warehousing certificates were also produced by M/s D.D. Trading Co. However, subsequent investigations revealed that such re-warehousing certificates produced by M/s D.D. Trading Co. were forged and the goods were cleared by them to local market.
3. In the above background, proceedings were initiated against the appellant for realization of duty of Rs. 17,48,530/- involved in respect of the goods cleared against the CT-3 certificate to M/s D.D. Trading Co. and for imposition of penalty. The said show cause notice culminated into an impugned order passed by the Commissioner confirming a demand of duty and imposition of penalty. Hence, the present appeal.
4. The appellant's main contention is that the goods having been cleared against the proper CT-3 certificate and re-warehousing certificate having been received by them from 100% EOU, the duty liability cannot be fastened upon them. In case such re-warehousing certificate having been found to be forged by 100% EOU, the duty demand should be raised against such 100% EOU. For the above proposition, they have also invited attention of the adjudicating authority to CBEC Circular No. 76/99-Cus, dt. 17.11.99, laying down that in case the re-warehousing certificate in respect of the consignment is not received within 90 days, the matter may be referred to jurisdictional Astt. Commissioner of Central Excise of 100% EOU, for issue of demand note on 100% EOU. The said circular does not stand followed by the Commissioner on the ground that this is not a case where re-warehousing certificate has not been received but this is a case where fake re-warehousing certificates have been furnished by the noticee.
5. We find no justifiable reason in the above observation of the adjudicating authority. There is nothing on record to show, much less any allegation, that it is the appellants who had prepared forged re-warehousing certificate. On the contrary, the investigations revealed that the consignee, a 100% EOU, was indulging in preparation of forged and fake re-warehousing certificate, in which case, the appellant cannot be doubted or penalized for placing the same before the authority. The Board's circular would definitely be applicable in as much as the same refers to non-receipt of re-warehousing certificate, but if the certificate issued by the above 100% EOU is found to be fake, the same would have more applicability. In any case, we find that the Tribunal in case of Santogen Textile Mill Ltd. v. CCE Mumbai-II 2007 (214) ELT 386 (Tri-Mumbai), has held that in cases where the 100% EOU has diverted the duty free procured goods to the market, instead of bringing the same in his factory, the manufacturer cannot be fastened with any liability in as much as he looses control over the goods so as to ensure safe reach of the same with the consignee. It is the 100% EOU, who has entered into a bond with the Asstt. Commissioner for proper accountal of receipt, storage and utilization of such goods and to pay, on demand, an amount equal to the duty leviable on the goods, if the same are proved not to have been used in connection with the production of the goods for export purposes. Similarly, in case of CCE Cochin v. BPL Systems & Projects Ltd. , it has been held that in case the goods are removed by a manufacturer on receipt of CT-3 certificate to a 100% EOU, and not used as envisaged, action for recovery of the duty liability on exemption availed at the stage of removal from the factory of the manufacturer has to be initiated by the officer incharge of 100% EOU and not that of the manufacturer's factory. Similar is the view taken in case of CCE Guntur v. Ferro Alloys Corpn. ; CCE Madras v. Madras Radiators Pressing Ltd. .
6. By following the ratio of above decision, we hold that the duty liability cannot be fastened upon the appellant. As regards the penalty imposed upon them, we find that there is no evidence on record to show that the appellant was in any way involved in procurement of fake and forged re-warehousing certificate or in the diversion of the goods. As such, we find no justification for imposition of penalty upon them.
Accordingly, the impugned order is set aside and appeal allowed with consequential relief.
(Pronounced in Court)