Re-warehousing certificates alone cannot sustain duty demand where consignee-side verification was not properly completed.

A duty demand for clearances to EOUs and SEZs cannot be sustained merely because re-warehousing certificates were not produced. Where the governing circular required consignee-side verification, weekly reminders, and satisfactory proof of receipt before recovery, the demand fails if that mechanism is not properly exhausted and the record does not establish non-receipt of goods. Here, the departmental records could not be traced and no effective consignee-side enquiry was completed, so absence of certificates alone was insufficient to confirm duty. The impugned order was set aside and relief followed for the assessee.

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Issues: Whether the demand of duty could be sustained solely on the ground that re-warehousing certificates were not produced for clearances made to EOUs and SEZs.

Analysis: The matter had earlier been remanded with a direction to make necessary enquiries from the consignee side and to examine collateral evidence. In the re-adjudication, the departmental offices recorded that the concerned records could not be traced because of passage of time and organisational changes, while the assessee did not furnish additional documents in support of receipt of goods. The governing circular required the consignor-side officer to make weekly reminders and the adjudicating authority to secure satisfactory proof of receipt before recovery of duty. Since the consignee-side verification was not effectively carried out and the demand was sought to be confirmed only on the absence of re-warehousing certificates, that basis was found insufficient to sustain the demand.

Conclusion: The demand could not be confirmed merely for non-furnishing of re-warehousing certificates, and the impugned order was set aside in favour of the assessee.

Final Conclusion: The duty demand based only on absence of re-warehousing proof was held unsustainable, with consequential relief granted to the assessee.

Ratio Decidendi: A duty demand for alleged non-receipt of goods under exemption-backed clearances cannot be upheld merely for want of re-warehousing certificates when the prescribed verification mechanism from the consignee side has not been properly exhausted and the record does not establish non-receipt.

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