Re-warehousing proof turns on actual receipt, not mere AR-3A formalities, so duty and penalty were deleted.

Goods cleared to a 100% EOU were treated as duly received and re-warehoused where departmental correspondence, officer verification and consignee records supported actual receipt. The AR-3A procedure was viewed as only evidentiary, not the substantive test, and the appellate authority held that the original authority had ignored material evidence; the duty demand and penalty were therefore not sustained.

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Issues: Whether the goods cleared to a 100% EOU were duly received and re-warehoused so as to satisfy the procedure under Rule 20 of the Central Excise Rules, 2002 read with the relevant notification, and whether the duty demand and penalty could therefore be sustained.

Analysis: The conclusion on re-warehousing was tested on the basis of the contemporaneous correspondence between the concerned Central Excise offices, the verification carried out by officers, and the records maintained at the consignee's end. The record showed that the AR-3A procedure was only a method of evidence for re-warehousing, while the substantive requirement was actual receipt of the goods in the consignee's warehouse. The appellate authority relied on departmental communications and on-site verification to hold that the goods had in fact been received and re-warehoused, and that the original authority had ignored material evidence supporting that conclusion.

Conclusion: The goods were held to have been re-warehoused, the procedural requirement was treated as complied with, and the Revenue's challenge to the deletion of duty and penalty failed.

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