2002 (3) TMI 486 - AT - Central Excise

Tribunal rejects duty demand on exported pumps, upholding compliance with Central Excise Rules

The Tribunal set aside a Central Excise duty demand of Rs. 4,90,949.35 on exported P.D. Pumps, rejecting the claim that the pumps were for home ... Export - Duty liability Issues:1. Central Excise duty demand on exported P.D. Pumps.2. Compliance with Rule 13 of the Central Excise Rules, 1944.3. Interpretation of goods exported under bond for structural changes.4. Application of Section 11A for duty recovery.Central Excise Duty Demand on Exported P.D. Pumps:The appellants manufactured P.D. Pumps and parts under Tariff Item 30A, cleared some pumps under bond for export to M/s. ONGC through a Korean company. The Central Excise authorities alleged the pumps were not for export but for home consumption at Bombay High, demanding duty payment of Rs. 4,90,949.35 under Section 11A. The Additional Collector confirmed the demand, leading to the appeal.Compliance with Rule 13 of the Central Excise Rules, 1944:The appellants argued compliance with Rule 13, stating the pumps were exported to South Korea under bond, with all formalities fulfilled. The Maritime Collector endorsed the proof of export to the Central Excise office, leading to the discharge of security bond and bank guarantee. The appellants contended no grounds existed for duty recovery under Section 11A.Interpretation of Goods Exported Under Bond for Structural Changes:The Additional Collector found the pumps were not used by the Korean company for their purpose but were returned for use by M/s. ONGC, constituting home consumption. Despite initial export under bond, the goods were brought back for actual use in India. The Additional Collector held duty recovery justified under Section 11A due to the absence of foreign exchange receipt.Application of Section 11A for Duty Recovery:The Tribunal considered the exported goods were duly cleared under bond and accepted by the department. Even if returned to India, there was no provision under Central Excise Law for duty recovery, which falls under Customs law. As Rule 13 was complied with, duty recovery was not supported by law. The impugned order was set aside, and the appeal allowed, as the duty demand lacked legal basis.This comprehensive analysis highlights the core issues of the judgment, focusing on the duty demand for exported goods, compliance with Central Excise Rules, interpretation of goods exported under bond, and the application of Section 11A for duty recovery, ultimately leading to the Tribunal setting aside the demand due to lack of legal support.