No redemption fine can be imposed on goods which were exported without furnishing bond
General Export Enterprises Vs. Commissioner of Customs, Nhava Sheva [2014-TIOL-1 752-CESTAT-MUM]
In the instant case, General Export Enterprises (the Appellant) had exported consignment of manmade fabrics. During the course of the investigation, the gram per square meter (GSM) values declared by the Appellant were found to be misdeclared but the goods were allowed to be exported without executing any bond. On adjudicating, it was held that there was a misdeclaration of the goods in question. Therefore, the goods were liable for confiscation and redemption fine of Rs. 8,00,000/- was imposed on the Appellant. The said order was challenged by the Appellant before the Hon'ble Mumbai Tribunal.
The Hon'ble Tribunal asked the Revenue to ascertain the fact whether any bond or undertaking was executed by the Appellant before the goods were exported. This query was not answered by the Department. The Hon'ble Tribunal observed that the goods are not liable for confiscation as the same are not available and also observed that the Appellant has not executed any bond or undertaking before the goods were cleared for export. Consequently, the Hon'ble Tribunal reduced the redemption fine from Rs. 8,00,000/- to Rs. 6,00,000/-. This part of the order was challenged by the Appellant before the Hon'ble High Court, which remanded the matter to the Hon'ble Tribunal to reconsider the issue.
The Larger Bench of the Hon'ble Mumbai Tribunal in the case of Shiv Kripa Ispat Pvt. Ltd. vs. Commissioner of Central Excise, Nasik [2009 (235) ELT 623 (Tri-LB)] ("Shiv Kripa Ispat Case") had held that if the goods were allowed to be exported without executing any bond or the goods are not available for confiscation, in that situation redemption fine cannot be imposed. In the instant case, the Revenue had failed to produce the evidence as to whether the subject goods were cleared for export under bond. Therefore, it was concluded that the goods in question were cleared for export without furnishing any bond. Therefore, it was held that although the goods were liable for confiscation; no redemption fine can be imposed in the light of Shiv Kripa Ispat Case.
(Bimal Jain, FCA, FCS, LLB, B.Com (Hons), Mobile: +91 9810604563, Email: bimaljain@hotmail.com)
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| Prepared by IFAC's Communications Department. Contact communications@ifac.org for further information. Copyright © 2014 by the International Federation of Accountants (IFAC). All rights reserved. Written permission from IFAC is required to reproduce, store or transmit, or to make other similar uses of, this document, except as permitted by law. Contact permissions@ifac.org. | |||||||||||||||||||||||||
Demand of duty on clandestine removal of excisable goods cannot be confirmed solely on the basis of presumptions and assumptions
Continental Cement Company and the Directors of the Company Vs. Union of India & Others [2014-TIOL-1527-HC-ALL-CX]
Continental Cement Company and the Directors of the Company (the Appellants) were manufacturers of ordinary Portland cement which was subject to Excise Duty under Central Excise Act, 1944.
The Department received an anonymous complainant indicating therein that during the period February 9, 1993 to September 27, 1995 about 3839.350 MT ordinary Portland cement was illegally sold which involved Excise Duty amounting to Rs.7,20,154/-, by using parallel documents like GP1s, invoices, challans , Bills, cash memo and GRs, etc.
The Department issued the Show Cause Notices and confirmed the demand of Excise Duty, which was set aside by the Commissioner (Appeals). However, the demand was restored by the Hon'ble Tribunal on appeal by the Department.
The Appellants preferred an appeal to the Hon'ble Allahabad High Court.
The Hon'ble Allahabad High Court noted the anonymous complaints were made on the basis of forged documents which were prepared by a Director who was removed from the Board of Directors. Therefore, the Hon'ble High Court held that there was no clinching evidence furnished by the Department in nature of purchase of raw materials, use of electricity, sale of final products, clandestine removals, the mode and flow back of funds, etc. Accordingly, it was held that demands cannot be confirmed solely on the basis of presumptions and assumptions. It was further held that clandestine removal is a serious charge against the Appellants, which was required to be discharged by the Revenue by production of sufficient and tangible evidence.
(Bimal Jain, FCA, FCS, LLB, B.Com (Hons), Mobile: +91 9810604563, Email: bimaljain@hotmail.com)
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