Tribunal Overturns Duty Order for Unauthorized Goods Clearance

The Tribunal allowed the appeals of the appellants, a company and its director, in their entirety, setting aside the impugned order confirming duty under the proviso of Section 3(1) of the Central Excise Act. The case involved the clearance of goods in the Domestic Tariff Area without permission, leading to duty demand and penalty imposition. The Tribunal held that duty for such actions by a 100% Export Oriented Unit should be under the main Section 3(1) of the Act, in line with the decision in Commissioner of Central Excise, Jaipur-II v. Pratap Singh case.

---

---

Issues involved: Appeal against duty confirmation and penalty imposition on company and its director for clearing goods in DTA without permission.

In the present case, the appellant company, a 100% Export Oriented Unit, cleared fabrics in the DTA without permission of the Development Commissioner, leading to duty demand and penalty imposition. The main issue revolves around whether the duty payable is under the main Section 3(1) of the Central Excise Act or under its proviso. The Tribunal referred to conflicting decisions, notably the view in M/s. Himalaya International Ltd. case and the judgment in Commissioner of Central Excise, Jaipur-II v. Pratap Singh case. The latter held that duty for clandestine removal by 100% EOU in DTA without permission is under the main Section 3(1), a decision affirmed by the Apex Court. Consequently, the Tribunal held that duty for the appellant company should be under the main Section 3(1) and not the proviso, leading to setting aside of the impugned order confirming duty under the proviso.

Therefore, the Tribunal allowed the appeals of the appellants in toto, setting aside the impugned order and providing consequential relief as permissible under the law.

---