Cce Delhi-Iii vs M/S Drishi Apparels

[Arising out of OIA No.29/GRM/GGN/2006, dt.27.01.2006, passed by Commissioner of Central Excise & Customs (Appeals), Delhi-III Gurgaon]

CCE Delhi-III Appellant

Vs

M/s Drishi Apparels Respondent

Represented by:

For Appellant: Shri Yashpal Sharma, Authorised Representative

For Respondent: None

For approval and signature:

Mr. P.K. Das, Honble Member (Judicial)

Mr. P.S. Pruthi, Honble Member (Technical)

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

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)

MR. P.S. PRUTHI, HONBLE MEMBER (TECHNICAL)

Date of Hearing/Decision:19.01.2015

Final Order No.50983/2015

Per: P.K. Das

1. The relevant facts of the case, in brief, are that the Respondents were engaged in the manufacture and export of Leather Garments classifiable under sub-heading No.4201.90 of the First Schedule to the Central Excise Tariff Act, 1985. In terms of Notification No.43/2001-CE(NT), dt.26.06.2001, the Respondents procured duty free Acrylic Knitted Panels for use in the manufacture and export of Suede Leather Garments with Acrylic Knitted Pannels. It has been alleged that the Respondents had not submitted application in Form ARE-2 in respect of garments exported. The Adjudicating Authority confirmed the demand of duty of Rs.5,72,384.00 alongwith interest. By the impugned order, the Commissioner (Appeals) set aside the adjudication order.

2. After hearing the learned Authorized Representative for the Revenue and on perusal of the records, we find that the main allegation against the Respondents is that they have not filed ARE-2 in terms of said notification. It is seen that the Revenue has not disputed the export of the goods in the grounds of appeal. The Commissioner (Appeals) had examined the records in detail. For the purpose of appreciation of the case, we reproduce the findings of the Commissioner (Appeals) herein below:-

8. In regard to non-filing of ARE-2, I find that except observing this formality, appellant have adhered to all other requirements prescribed under Central Excise (Removal of Goods at concessional rate of duty for manufacture of excisable goods) Rules, 2001 as well as in Notification No.43/2001-CE(NT), dt.26.06.2001 such as maintenance of records showing receipt and consumption of acrylic knitted panels; the number of garments manufactured therefrom; and also furnished the said details in the form of monthly statements, receipt of which were duly acknowledged by the department. Thus, merely for the reason that ARE-2 in respect of quantity of garments exported was not filed, this in itself is not enough to hold that the acrylic knitted panels obtained free of duty were not used in the exported garments warranting demand of duty involved on the knitted panels in question. A perusal of the relevant export orders; sketch drawings of the said garments; test reports of the samples of the garments in question; the corresponding shipping bills including other related export documents are ample evidences to establish that suede leather garments with acrylic knitted panels were exported.

With regard to the other ground that it was not possible to draw a definite inference that same acrylic panels were used in the exported garments, which were procured free of duty, I find that the adjudicating officer in his order under appeal has not adduced any tangible evidence in support of the said inference drawn by him. In absence of any such evidence having been brought on record, no adverse inference can be legally drawn merely on presumptions and conjectures. It is a well settled law as held by the Supreme Court in the case of Oudh Sugar Mills (supra) and followed by the CEGAT in the case of Durga Trading Company (supra), as relied upon by the appellant, that demand of duty cannot be raised on the strength of inferences involving unwarranted assumptions, I also find that the principle laid down by the Honble CESTAT in the case of M/s EVES Fashion (supra), as relied upon by the appellant, wherein it has been held that benefit of Rule 19 of C.E. Rules, 2002 cannot be denied if the goods have been exported without following procedure under Notification No.42/2001-CE(NT), dt.26.06.2001, is applicable to the present case.

In the relied upon case, the demand of duty had been confirmed on the ground that while exporting the goods the party failed to follow the procedure laid down in the Notification No.42/2001-CE(NT), dt.26.06.2001 as much as they did not furnish the bond, letter of undertaking etc but Honble CESTAT has unequivocally found this ground not sustainable for confirmation of duty. The instant case appears to be on a strong footing where the important statutory formality of execution of bond and furnishing of Bank Guarantee has been duly observed by the appellant. The ratio of above cited case is squarely applicable on the instant case.

3. There is no dispute that conditions of exemption notification should be construed strictly. In the present case, the condition of exemption notification is that the duty free input has to be used in the exported goods. It is evident from the finding of the Commissioner (Appeals) that the duty free inputs were used in the manufacture of export goods and duly recorded in the registers verified by the Central Excise officers, and therefore, the conditions of notification are substantially complied with by the respondent.

4. Hence, we do not find any infirmity in the order of the Commissioner (Appeals). Accordingly, the appeal filed by the Revenue is rejected.

(Dictated & Pronounced in Court)

(P.S. Pruthi) (P.K. Das)

Member (Technical) Member (Judicial)

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