Custom, Excise & Service Tax Tribunal
Echjay Industries Pvt Ltd vs Rajkot on 17 August, 2018
1|Page C/179/2010-DB
In The Customs, Excise & Service Tax Appellate Tribunal
West Zonal Bench At Ahmedabad
Appeal No.C/179/2010-DB
[Arising out of OIA-35/2010/COMMR-A-/RAJ dated 21.01.2010 passed by the Commissioner of Central
Excise, CUSTOMS (Adjudication)-RAJKOT]
M/s Echjay Industries Appellant
Vs
C.C.E., Service Tax- Rajkot Respondent
Represented by:
For Appellant: Shri R.Subramanya (Advocate) For Respondent: Mr.S.N.Gohil (A.R.) CORAM:
HON'BLE MR. RAMESH NAIR, MEMBER (JUDICIAL) HON'BLE MR. RAJU, MEMBER (TECHNICAL) Date of Hearing: 13.08.2018 Date of Decision:17.08.2018 Final Order No. A / 11781 /2018 Per: Ramesh Nair
1. The brief facts of the case are that the appellant engaged in the manufacture of forgings and forges articles of steel falling under Chapter Sub heading 7326.90, 8708.00 etc of the Central Excise Tariff Act, 1985.
They have imported the goods namely, Alloy Steel Forging Outlet (LH) and Alloy Steel Forging Flange Outlet (RH) under Notification No.32/97-Cus Dtd.1.4.1997 for the purpose of Job Work and for re-export of the resultant goods. The manufactured goods out of the imported material were cleared by the appellant for export under ARE-1, goods were stored at the Customs warehousing at JNPT. A fire broken out at the godown, Dronagiri on 7.6.2002 and the exported goods stored there were destroyed. The appellant lodged insurance claim, in respect of the Job work charges and the
2|Page C/179/2010-DB same was received by them from the insurance company. The department issued a Show cause notice proposing demand of Customs duty on the imported goods used in the excisable goods which were manufactured and destroyed in fire. The demand of Central Excise duty was also raised, in respect of the finished goods destroyed, the adjudicating authority did not demand Excise duty on limited goods. On the ground that the Commissioner of Central Excise, Rajkot has Vide order Dated 13.01.2004, remitted the Central Excise duty upon the goods destroyed but the Customs duty demand raised in the Show cause notice was confirmed along with interest. Being aggrieved by order in original, appellant filed appeal before the Commissioner (Appeals) which came to be rejected. Hence, the present appeal.
2. Shri. R. Subramanya, Ld. Counsel appearing on behalf of the appellant submits that there is no dispute that the goods imported under Notification no.32/97-Cus were used and the final product was manufactured out of it but the said final product was destroyed. The said final product were cleared for export under ARE-1 and Shipping bill was also issued the Customs authority also issued the let Export Order, therefore, the goods were exported, the insurance Claim was received from the insurance company. Therefore, in terms of Foreign Trade Policy Handbook of procedures 2004-9. In para 2.25.2 it is stated that "in cases where exports have been made and payment realized through the general insurance cover on amount of transit loss or other circumstances, the amount of the insurance cover paid would be treated as payment realized on account of exports under the various export promotion schemes".
3. Therefore, the goods cleared for export and even though the same could be physically supplied to foreign party but insurance claim was
3|Page C/179/2010-DB received, hence the entire exercise will amount to export of goods, therefore, the compliance of condition of Notification No.32/97-Cus stood made, therefore, the demand of Customs duty by denying the Exemption Notification No. 32/97-Cus is not legal and proper. He placed reliance on judgment of this Tribunal in case of Alsa Marine & Harvests Ltd Vs, CC., 2007 (216) ELT 405 (Tri.Chennai).
4. Shri.S.N.Gohil, Ld. Superintendent (AR) appearing on behalf of the Revenue reiterates the findings of the impugned order.
5. On careful consideration of the submission made by both the sides and perusal of records, we find that the appellant intimated to the Commissioner of Customs JNPT regarding loss of goods and remission of Customs duty, however, the Commissioner has not responded. This has been recorded by both the lower authorities but it was contended that since, there is no reply from the Commissioner of Customs JNPT, they cannot wait for the same and accordingly proceeded to confirm the demand and upholding the same.
6. In our considered view, once the appellant have written letter for loss of their goods and remission of duty, without any decision on their request by the Commissioner of Customs JNPT, both the lower authorities should not have proceeded with deciding a Show cause notice and subsequently the appeal, therefore, in our view confirmation of demand and first appellate order is premature. Hence, the same is required to be set aside on this ground itself.
7. Accordingly, we remand the matter to the adjudicating authority. The commissioner of Customs JNPT is also directed to dispose of the letter dated 16.04.2003 submitted by the appellant only, thereafter, the adjudicating authority would pass the De-novo adjudication order. The register is directed
4|Page C/179/2010-DB to send a copy of this order to the Commissioner of Customs Jawaharlal Nehru Customs House, Group-IV, JNPT Nhava Sheva.
8. Being the matter very old, the Commissioner of Customs Nhava Sheva shall dispose of the appellant's letter dated 16.04.2003 within a period of 3 months from the date of this order and thereafter, the adjudicating authority shall passed De-novo adjudication within next 2 months from the date of the order of the Commissioner of Customs on the request for remission of Customs duty of the appellant.
9. The appeal is disposed of by way of remand in the above terms.
(Pronounced in the open court on 17.08.2018)
(Raju) (Ramesh Nair)
Member (Technical) Member (Judicial)
Prachi