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of <h1>Appeal on Duty Demand for Goods Cleared at Nil Rate Upheld</h1> <h3>COLLECTOR OF CENTRAL EXCISE, GUNTUR Versus FERRO ALLOYS CORPORATION</h3> The appeal contested duty demand for goods despatched under Chapter X procedure. The Collector (Appeals) allowed the Respondent's appeal, citing goods ... Chapter X Procedure - Demand Issues: Appeal against order of Collector (Appeals), Madras regarding duty demand for goods despatched under Chapter X procedure.Summary:The appeal contested the duty demand for goods despatched under Chapter X procedure to the consignee, which were not properly accounted for post-despatch. The Collector (Appeals) allowed the appeal of the Respondent, stating duty could not be demanded as the goods were cleared at nil rate of duty under a specific notification u/r 8(1) of the Central Excise Rules, 1944. The appellant-Collector argued that duty liability should fall on the manufacturer for goods not accounted for as per rules, invoking Rule 49 of the Central Excise Rules, 1944.The learned D.R. contended that although goods were cleared under Chapter X procedure, they were not received by the consignee, necessitating payment of differential duty by the Respondent. Despite no representation from the Respondent, it was observed that 7 consignments cleared at concessional rates did not reach the consignees, leading to duty demand under Rule 156B and Rule 173N. The original authority concluded duty could only be demanded u/r 49, which was upheld by the Collector (Appeals).The Collector (Appeals) determined that duty recovery could only be pursued under Rule 196 of Chapter X, emphasizing the shift in responsibility to the consignee upon valid clearance under L 6 licence. The manufacturer's obligation ends upon despatch to a licensed consignee, with no legal requirement for ensuring final delivery. The Revenue's security lies in the consignee's bond for due accountal, absolving the manufacturer of liability unless bonded. As the Revenue failed to prove goods moved under the manufacturer's bond, the appeal was dismissed, ruling no merit in the Revenue's plea.
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