CESTAT Mumbai: Duty demands on goods set aside due to lack of export proof

The Appellate Tribunal CESTAT MUMBAI set aside the duty demands on goods, specifically patent and propriety medicines, due to the failure to produce proof of export. The appellant's argument that the responsibility of proof of export lies with the issuers of CT-I certificate was accepted. The Tribunal found that the appellant should not be held accountable for the merchant-exporter's procedural lapses, leading to the duty liability being deemed unsustainable. Consequently, the impugned orders were overturned, and the appellant was relieved from the duty demands.

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Issues: Duty demand on goods claimed to be exported under bond due to failure to produce proof of export

Analysis:
The judgment by the Appellate Tribunal CESTAT MUMBAI pertains to four appeals consolidated into a common order. The impugned orders-in-appeal dated 22nd May, 2014, confirmed the duty demand on goods, namely patent and propriety medicines, which were claimed to have been exported under bond but lacked proof of export. The appellant argued that they were not obligated to comply with such conditions and that the responsibility of proof of export lies with the issuers of CT-I certificate.

The original demand amounting to Rs. 16,22,786 was reduced to Rs. 3,92,661 upon the production of proof of exports totaling Rs. 1,52,000. However, amounts related to specific appeals were still outstanding. The Authorized Representative relied on the mandatory requirements outlined in notification no. 42/2001-CE(NT) dated 26th June 2001, which stipulates export within six months from the factory clearance date.

The procedure mandates that merchant-exporters obtain CT-I certificates from Central Excise officers for supplying goods without duty payment under bond. The duty liability falls on the merchant-exporters, and non-compliance may result in duty payment along with interest. The Tribunal found merit in the appellant's argument that they should not be held responsible for the merchant-exporter's procedural lapses, leading to the duty liability being deemed unsustainable.

As a result, the impugned orders were set aside, and the appeals were allowed, relieving the appellant from the duty demands imposed due to the failure to produce proof of export for the goods claimed to have been exported under bond.

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