1997 (4) TMI 259 - AT - Central Excise

Department's Appeal Rejected for Proper Entries Despite Unauthorized Reprocessing

The Department's appeal against the Collector (Appeals) order was rejected by the Appellate Tribunal CEGAT, New Delhi. The respondents' actions did not ... Removal of recorded finished goods from bonded storeroom for reprocessing/recycling - Effect of entries in RG 1 and RT 12 on liability for duty - Authority of departmental instructions and trade notices permitting removal for conversion/alteration subject to accountal - No duty/penal liability where departmental intimation and prescribed accountal are made and supervision offeredRemoval of recorded finished goods from bonded storeroom for reprocessing/recycling - Effect of entries in RG 1 and RT 12 on liability for duty - Whether removal of goods entered in RG 1 for internal reprocessing/recycling without prior physical permission attracts duty or constitutes an offence where the assessee had informed the Department, made appropriate entries in RG 1 and RT 12 and offered departmental supervision - HELD THAT: - The Tribunal accepted the respondents' case that they had informed the Department (letter dated 14-1-1993), recorded the goods in RG 1 and made appropriate entries in RT 12, and had offered departmental supervision for reprocessing/reconditioning within the factory. The Collector (Appeals) correctly relied upon the Board's instructions (letter No. 22/71/CX.6 dated 30-10-1971) and the Cochin Collectorate Trade Notice No. 156/76 dated 22-9-1976, which permit a manufacturer to remove goods deposited in the bonded storeroom for conversion/alteration provided the necessary entries are made in the accounts. In the light of those departmental instructions and the factual accountal and intimation by the respondents, the Tribunal found that no duty was chargeable and no offence was made out.The Collector (Appeals) was justified in allowing the respondents' appeal; the Department's appeal is rejected.Final Conclusion: The departmental appeal is dismissed: removal of goods recorded in RG 1 for internal reprocessing/recycling, when accompanied by departmental intimation, proper entries in RG 1 and RT 12 and an offer of supervision, attracted no duty and did not constitute an offence in view of the Board instructions and trade notice relied upon. The Department's appeal against the Collector (Appeals) order was rejected by the Appellate Tribunal CEGAT, New Delhi. The respondents removed items for reprocessing without permission, but had made proper entries in RG 1 and RT 12 registers. The Collector relied on Board's instructions and trade notices, leading to the appeal rejection. No duty is chargeable, and no offense is made out.