2021 (11) TMI 12 - AT - Central Excise

Tribunal grants appeal for duty-free raw materials destruction, citing compliance with amended Notifications.

M/s Biocon Limited Versus Commissioner Of Central Tax, Bengaluru South Commissionerate

The Tribunal ruled in favor of the appellant, setting aside the lower authorities' rejection of refund claims related to duty-free raw materials ... 100% EOU - seeking refund of the duty paid, on duty free materials which were destroyed - importation of raw materials were allowed duty-free - applicability of N/N. 52/2003-CUS dated 31.03.2003 - HELD THAT:- An almost identical issue has been decided by this very Bench in the case of SAINT GOBIN CRYSTALS & DETECTORS (I) LTD VERSUS BANGALORE-CUS [2018 (4) TMI 167 - CESTAT BANGALORE] where it was held that the refund claim has only been rejected on the ground that warehousing period has been expired whereas the fact of the matter is the Customs licence granted to the appellant had been renewed and the goods were still in the bonded warehouse. Further I find that the claim for refund under Section 27 of the Customs Act, 1962 has not been considered at all since the impugned order gives finding beyond the scope of the proceedings. It is also a fact that the goods are still in the bonded warehouse only and the appellant’s unit will continue to be an EOU. The perusal of the orders of the lower authorities does not allege that the appellant had not fulfilled the export obligation and accordingly, the ratio in the Saint Gobin Crystals of this Bench squarely applies - Moreover, the Notification No.52 ibid as amended by Notification Nos. 30 and 34 ibid clearly prescribe vide new Condition No.8, that no duty shall be leviable if raw material is destroyed within the unit after intimation to the Customs authorities. A conjoint reading of the amended Notifications as well as the ratio laid down in the case of Saint Gobin Crystals, leads to the only possible inference that the Revenue authorities have erred in demanding payment of duty and consequently, the appellant is entitled for refund of the same - appeal allowed - decided in favor of appellant. Issues:Appeal against Orders-in-Appeal related to duty-free raw materials destruction and refund claim.Analysis:The appeals involved interpretation of Notifications regarding destruction of duty-free raw materials. Appellant, a 100% Export Oriented Unit, procured raw materials duty-free for manufacturing and exporting final products. The raw materials became obsolete, leading to a request for their destruction. The Revenue demanded duty payment before destruction, prompting refund claims by the appellant. The lower authorities rejected the refund claims, leading to the appeals.The appellant argued that amended Notifications allowed duty-free destruction of raw materials within the unit with intimation to Customs authorities. They cited Foreign Trade Policy-2009-2014 and relevant judicial decisions supporting their claim. The Authorized Representative, however, supported the lower authorities' findings and referenced a different case to counter the appellant's arguments.The Tribunal analyzed a similar issue in a previous case and found in favor of the appellant. The Tribunal noted that the appellant fulfilled export obligations and the amended Notifications allowed duty-free destruction of raw materials within the unit. The lower authorities failed to consider the relevant provisions and principles, leading to an erroneous demand for duty payment. Consequently, the Tribunal set aside the impugned orders, allowing the appeals with consequential benefits as per law.In conclusion, the Tribunal ruled in favor of the appellant, emphasizing the legality of duty-free destruction of raw materials as per amended Notifications and relevant provisions. The decision highlighted the importance of fulfilling export obligations and complying with the applicable policies and principles in such cases.