2009 (6) TMI 280 - AT - Central Excise

Tribunal Remands Case for Verification of Duty Demands, Emphasizes Procedural Compliance

The Tribunal remanded the case to the original adjudicating authority, directing the appellants to provide entry numbers or collateral evidence within ... Appellants could not produce proof of re-warehousing - Appellant had cleared various petroleum products under Rule 173N of CER, 1944 to different warehouses – as per rule the duplicate copy of AR3A (Application for removal) is not produced with endorsement of re-warehousing of the goods cleared – whether absence of entry number in AR3A form submitted by the appellant, is a substantive requirement or not - we are unable to accept the submission of the appellant that entry number is not at all a substantive requirement and without entry number the AR3A submitted by them should have been accepted - We find that this is a very fair offer and the appellants should be given another opportunity to submit details of entry number against which the goods were received in respect of consignment in dispute or produce collateral evidence to show that the quantities shown to have been received as per re-warehousing certificate have actually been received - For this purpose, we remand the matter to the original adjudicating authority – Since goods are dispatched to re-warehousing all over the country not only belonging to the IOCL but also other oil marketing companies, we find that the penalty need not be imposed on the appellant. Issues:1. Duty demand on failure to produce proof of re-warehousing within 90 days.2. Confirmation of demand by Commissioner (Appeals) and reduction of penalty.3. Requirement of entry number in AR3A form for verification.4. Fairness of Commissioner (Appeals) in confirming demand.5. Remand of the matter to the original adjudicating authority for verification.Analysis:1. The appellants, engaged in petroleum products, faced duty demand for not proving re-warehousing within 90 days. The Commissioner (Appeals) upheld part of the demand, reducing the penalty to Rs. 50,000.2. The advocate argued that the re-warehousing certificate's missing entry number shouldn't invalidate compliance. They contended that the public sector nature of the appellant and duty payments for short receipts showed fulfillment of obligations.3. The SDR argued that the entry number is crucial for verifying AR3A forms. The Commissioner (Appeals) considered evidence submitted by the appellants but upheld demands where proof was lacking.4. The Tribunal assessed whether the absence of entry numbers was a substantive requirement. Despite acknowledging the appellant's bona fide intentions, they emphasized the importance of procedural compliance for verification and prevention of manipulation.5. The Tribunal remanded the matter for the appellants to provide entry numbers or collateral evidence within three months. Failure to do so would uphold duty payment obligations. No penalty was imposed due to the nature of the goods and the appellants' cooperation.This judgment highlights the significance of procedural compliance in verifying duty demands, emphasizing the need for complete documentation to prevent potential discrepancies.