AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2016 (1) TMI 1060
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....nt imported Greek raw cotton, free of duty, in terms of notification in question vide bill of entry dated 23.6.2003. Said raw material was consigned to the appellants factory in 15 containers and from 27.6.03 onwards, they started receiving the containers in question. The receipt of the goods were recorded in gate register, stock register and appendix 18. 3. The appellants factory was visited by Central Excise officers on 5.7.03, who conducted various checks and verifications. The visiting officers entertained a view that stock of Greek raw cotton imported by the appellant free of duty was not duly entered in the statutory records, though they found that the same was entered in the gate register. As such, the officers plea that the appellant had a malafide intention for misuse of import export benefits available to 100% EOU. Accordingly, they put the stock of 298770 Kgs. of Greek raw cotton under seizure. Statement of Shri H. K.Tiwari, authorised signatory was recorded wherein he admitted the lapse of non-accountal of said raw materials in the respective registers. 4. On the above basis, the appellants were issued a show cause notice alleging that they have contravened the provis....
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....on were imported after issuance of annexure A by their jurisdictional Central Excise officer, who has issued the said annexure after satisfaction of the terms and conditions of the notification and after execution of bond. The goods imported were entered in the gate register, the stock register (raw material register) and appendix 18. All the raw materials procured free of duty were recorded in the raw materials register / stock register, which finds a mention in the list of account and records maintained by the appellant and submitted to the department on 1.4.02. Otherwise also, it is the contention of the appellant that the provisions of Rule 7(b) of Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996 do not apply in their case inasmuch as the imports stand made in terms of provisions of notification No. 52/2003-Cus dated 31.3.02 and the said notification nowhere obliges the appellant to follow the said Rule. As much as appellant was maintaining the appendix 18, as prescribed along with stock register and as duly complied with condition 3(b) of notification in question, the reasoning of the authorities below is not in accordance w....
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....in ground on which the lower authorities have held the goods liable to confiscation and the appellants liable to penalty as violation of provisions of Rule 7(b) of Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996. For better appreciation, we reproduce the said Rule as under: "RULE 7. Manufacturer to give information regarding?[receipt of the imported goods and maintain records. - The manufacturer, obtaining benefit in these rules, shall, - (a) give information of the receipt of the imported goods in his factory, within two days (excluding holidays, if any) of such receipt, to the Superintendent of Central Excise ????having jurisdiction over his factory; and [(b) maintain a simple account indicating the quantity and value of goods imported, the quantity of imported goods consumed for the intended purpose, the quantity remaining in stock, bill of entry wise and shall produce the said account as and when required by the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise.]" We may also refer to Rule 2(1A) of the said Rules, which is as under:- "These rules shall apply o....
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....r (Technical) 16. I have gone through the draft order prepared by Ld. Member Judicial in respect of above Appeal wherein it has been held that recording of entries relating to receipt of duty free goods under the provisions of Rule 7(b) of Customs (Import of goods at concessional Rate) Rule, 1996 and also in terms of Notification No. 52/2003-Customs dated 31.03.2003 are not mandatory and consequently fine and penalties against the appellants are not imposable and accordingly dropped the proceedings. 17. I do not agree with the findings of the Member Judicial as per discussion in succeeding paras. For the sake of reference, facts described in the draft order are perused. 18. To appreciate the issues involved in the proceedings, it is necessary to recapitulate the facts of the case. It is observed that M/s Winsom Spinners were granted permission under the provisions of Rule 7(b) of Customs (Import of goods at concessional Rate) Rule, 1996 read with Section 12 of the Customs Act, 1962 and General Condition of Duty free Import of Customs Manual of Instructions. When the Departmental officers conducted investigations in the factory premises on 05.07.2003, it was found that duty free ....
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....rpose, the quantity remaining in the stock, bill of entry wise and shall produce the said account as and when required by the Assistant Commission of the Central Excise or Deputy Commissioner of Central Excise." 21. Further, Notification No. 52/03-Cus prescribes that a 100% EOU to maintain proper account of receipt and utilisation of the goods. Non-accountal in the required records of the impugned goods have been admitted by the authorised signatory of the appellant in his confessional statement dated 05.07.2003. I am not in agreement with the finding that Appellants have maintained such accounts as required under the Notification above. 22. It is observed that records were not maintained as required under Rule 7(a) and 7(b) of the Rules, above. It is observed that these Rules are mandatory in nature as the word used is 'shall' and not 'may' even if the word 'may' would have been used, its connotation would have been 'shall' only because it is the duty of the availer of the benefits of duty concession to comply with the condition and not have a liberal view of not maintaining prescribed record with proper timely entries and filing of intimation to the concerned authority in speci....
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.... are strict as government revenue are at stake. Duty exemption is granted in the context that the goods received are duly accounted in prescribed registers and within specified time schedule. If an approach to condone these type of derelictions is adopted, then implementation of the Notification and rules referred above will not be possible resulting in prejudice to the Revenues interest. In this regard, reference is made to the Supreme Court Judgment in the case of Commissioner of C. Excise, New Delhi Vs. Hari Chand Shri Gopal reported in 2010 (26) E.L.T. 3 (S.C.) where guidelines have been laid down in similar type of situation where follow up of chapter X procedure is stipulated when exemption of duty is granted under some specific notification in para 22, 23 and para 24 of the judgement Exemption Clause - Strict Construction 22. The law is well settled that a person who claims exemption or concession has to establish that he is entitled to that exemption or concession. A provision providing for an exemption, concession or exception, as the case may be, has to be construed strictly with certain exceptions depending upon the settings on which the provision has been placed in....
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....e is a judicial invention, equitable in nature, designed to avoid hardship in cases where a party does all that can reasonably expected of it, but failed or faulted in some minor or inconsequent aspects which cannot be described as the 'essence' or the "substance" of the requirements. Like the concept of 'reasonableness', the acceptance or otherwise of a plea of 'substantial compliance' depends upon the facts and circumstances of each case and the purpose and object to be achieved and the context of the prerequisites which are essential to achieve the object and purpose of the rule or the regulation. Such a defence cannot be pleaded if a clear statutory prerequisite which effectuates the object and the purpose of the statute has not been met. Certainly, it means that the Court should determine whether the statute has been followed sufficiently so as to carry out the intent for which the statute was enacted and not a mirror image type of strict compliance. Substantial compliance means actual compliance in respect to the substance essential to every reasonable objective of the statute and the court should determine whether the statute has been followed sufficiently so as to carry o....
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..../94 in the central excise Baddi to Shimla (HP) of Central Excise Commissionerate, Chandigarh las a 100% E.O.U 2. The said unit has executed bond in Form B-17 prescribed for a 100% EOU for Rs. 10 crores with the appropriate surety and the said bond has been accepted by the competent authority 3. This registration authorised them to obtain/clear the following:- SR. Description Qty Chap No. Heading No of Cus Tariff 1. RAW COTTON 1373 Bales 52 5201.0 Gross wt. 301140 Kgs Net wt. 298770 Kgs. Against Invoice No. 101686 dated 21.05.2003 of MC FADDEN EUROPE CO SWITZERLAND at nil rate of duty under notification no. 53/97-Cus dated 03.06.97 being a 100% EOU via NHAVA SHEVA MUMBAI FROM ICD DELHI for the manufactures of yarn at 100% EOU WINSOME SPINNERS prop (WINSOME TEXTILE INDUSTRIES LTD) BADDI Distt. SOLAN (H.P) 4. The said goods may be allowed clearance of at NIL rate of duty and the undersigned may be suitable informed (SUPERINTENDENT) CENTRAL EXCISE RANGE-II BADDI DISTT., SOLAN (H.P) Reference is also invited to Boards Circular No. 84/2001-Cus. Dated 21.12.2001 where policy and procedure for procurement, of CT-3 certificat....
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....ons issued by the Board from time to time for proper monitoring and checking the misuse of EOU/EPZ/STP/ETHP Schemes are strictly followed by the field officers under their charge. In this connection, the instructions issued vide Circular No. 88/98-Cus, dated 2-12-1998 and Board's letter F.No. 305/119/2000-FTT dated 17th October, 2000 and Member (Customs)'s d.o. letter F.No. 305/139/2001-FTT dated 19.10.2001 refer. 5. The Board's Circular No. 84/2001-Cus dated 21st December, 2001 stands modified upto the above extent. 6. Wide publicity may be given to the above changes by issue of a Public Notice in this regard. 7. Difficulties, if any, faced in implementation of the above changes may be brought to the notice of the Board at already date. 25. From the above references, it clearly comes out that procedural safe guards have been inbuilt so that though inputs are allowed to be received without payment of duty, but their subsequent movement receipt and proper accountal in a periodical schedule is must. A firm duty is cast on the person availing concession of duty and he can not be seen to ignoring such controls. 26. Accordingly I do not agree with findings recorded by learned m....
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....ginal. But both the authorities held that the said goods were not entered in the records meant for central excise purpose and did not intimate the receipt of the goods to the Central Excise Officer. The primary adjudicating authority as well as first appellate authority held that the appellant has not met the requirements as contained in Rule 7 of Customs (Import of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 1996 as also condition 3(b) of the Notification No.3(b) of Notification No.52/2003-Cus. But the Show Cause Notice issued to the appellant was entirely predicated on the appellant having contravened the provisions of Rule 7(b) of the said Rules. The primary adjudicating authority ordered confiscation of the impugned goods and allowed the redemption on fine of Rs. 10 lakhs and also imposed penalty of Rs. 21,05,409/-. This order was upheld by the first appellate authority. After hearing the matter, one ld. Member of CESTAT set aside the impugned Order-in-Appeal, while the second ld. Member upheld the impugned order except to the extent of reducing the penalty from Rs. 21,05,409/- to Rs. 5.5 lakhs. 5. Ld. Counsel for the appellant has contended t....