M/S. Swati Exim Pvt. Ltd vs Commissioner Of Central Excise

[Arising out of Order-In-Appeal No. 23/CE/APPL/NOIDA/ 2013 dated 28/02/2013 passed by Commissioner of Central Excise (Appeals), NOIDA]

For approval and signature:

Honble Mr Ashok Jindal, Member (Judicial)

1 Whether Press Reporters may be allowed to see the 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 the Order?

4 Whether Order is to be circulated to the Departmental authorities?

M/s. Swati Exim Pvt. Ltd. Appellants

Vs.

Commissioner of Central Excise Respondent

NOIDA

Appearance:

Shri Bipin Garg, Advocate for the Appellants

Shri B B Sharma, AR for the Respondent

CORAM:

Hon'ble Shri Ashok Jindal, Member (Judicial)

Date of Hearing /decision: 23.06.2015

ORDER NO. FO/52014/2015-Ex(SM)

Per Ashok Jindal :

The appellant are manufacturers of readymade garments. On 10/5/11, they cleared the consignment of 36075 pieces of Kaftans under ARE-1 under bond for export out of India. However, prior to export, the goods were inspected by the buyers representative in their inspection office in Delhi who rejected the goods, as the same were not as per the quality required by them. According to the appellant, the goods were returned to the factory on 13/5/11 and on 24/5/11, the buyer in the U.K. also cancelled the order. However, the intimation regarding the return of the rejected export consignment was given by the appellant to the department only on 10th October 2005. At this stage, the department asked the appellant to produce the original and duplicate copies of ARE-1, but according to the appellant, since the same had been lost, they were not in a position to produce the same and therefore they prepared fresh copies of the ARE-1. The goods lying in the factory, which according to the appellant, were same as the goods which had been cleared for export, were examined by the Range Officer with reference to triplicate and quadruplicate copies of the ARE-1 and though the Range Officer reported that the good found in the factory match in terms of general description in the ARE-1, he concluded that it cannot be proved that the said goods are the same as the goods, which has been cleared for export under ARE-1 dated 10/5/11. On this basis, a show cause notice was issued to the appellant for demand of duty of Rs. 1,09,848/- alongwith interest and imposition of penalty, alleging that the goods cleared under ARE-1 was illicitly diverted. The Jurisdictional Assistant Commissioner vide order-in-original dated 17/10/12 confirmed the above-mentioned duty demand alongwith interest and imposed penalty of equal amount. This order of the Assistant Commissioner was upheld by the Commissioner (Appeals) vide order-in-appeal dated 28/2/13 against which this appeal has been filed.

2. Heard both the sides.

3. Shri Bipin Garg, Advocate, the learned Counsel for the appellant, pleaded that the goods cleared under ARE-1 No. 30/2011-12 dated 10/05/2011 had been inspected by the representatives of the overseas buyers and had been rejected as the quality of the goods was not as per their requirement and for this reason only, the goods cleared on 10/5/11 under the above-mentioned ARE-1 were returned to the factory on 13/5/11, that in this regard the appellant have produced the transporters GR, that the only lapse on the part of the appellant was that though the intimation regarding return of the goods cleared for export was required to be given within 24 hours in terms of the Boards instructions, just for this lapse, the duty in respect of the goods can not be demanded as the goods had been returned to the factory, that the goods available in the factory has been inspected by the Range Officer and he has observed that the description tallies with the description in the invoices, but still he has stated that the goods cannot be treated as same which had been cleared under ARE-1 No. 30/2011-2012, that from the records of the case, it is clear that the goods cleared under ARE-1 were returned to the factory and had not been illicitly diverted and hence the duty demand in respect of the same and imposition of penalty is without any basis. He, therefore, pleaded that the impugned order be set aside.

4. The learned AR, opposed the contentions of the learned Counsel by reiterating the findings in the Commissioner (Appeals)s order and pleaded that the appellant did not inform the department regarding return of the goods within 24 hours, as required in terms of the Board instructions, that they are not even in a position to produce the original and duplicate copies of the ARE-1 under which the goods had been cleared for export, that there are discrepancies in the documents original and duplicate copies of the ARE-1 produced by them, that the Range Officer has also not certified that the goods available in the appellants factory are same as ones which had been cleared under ARE-1 return No. 30/2011-2012 and that in view of these circumstances, the duty demand has been correctly confirmed.

5. I have carefully considered the submissions from both the sides and perused the records.

6. The goods, in question, had been cleared on 10/5/11 under ARE-1 No. 30/2011-2012 for export under bond. According to the appellant these goods could not be exported, as the buyers representative in pre-shipment inspection rejected the consignment as the same was not as per their quality specifications. According to the appellant for this reason only, the goods were returned to the factory through M/s Bachan Tempo Service under their GR No. 06/68 dated 13/5/11. There is no dispute that a consignment of the garments was available in the factory and the Jurisdictional Range Officer after inspecting the same has given a report that those goods are in accordance with the description given in the invoices, but still he has said that it cannot be proved that the goods available in the factory are the same as the goods cleared under ARE-1 No. 30/2011-2012 dated 10/5/11. While it is true that the appellant did not intimate the return of the goods within 24 hours, the fact remains that they have produced Transport companys GR and as such no inquiry has been conducted with the transporter. Moreover, there was a consignment of Kaftans available in the factory which appeared to be covered by the export invoice. In view of these circumstances, I hold that the duty cannot be demanded. Only lapse of the appellant is that he did not intimate to the department in time which cannot lead to demand of duty.

7. Therefore, the impugned order is set aside and the appeal is allowed.

(Dictated and pronounced in the open court )

( Ashok Jindal ) Member(Judicial)

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