TaxTMI 
TaxTMI 
2018 (7) TMI 282
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....was recorded from the authorised signatory and the General Manager of the appellant, wherein, it was stated that the appellant had manufactured and cleared leather shoe uppers to M/s.Metro & Metro, Agra to the value of Rs. 1,61,12,084/- during the year 2004-2005. He stated that these leather shoe uppers were sold, to M/s.Metro and Metro and they have been removed only by paying Central sales tax and that no excise duty on the said leather show uppers were paid. This was so because they felt that they would be used by M/s.Metro & Metro for the manufacture and export of full shoes and that no duty was required to be paid. The said authorised signatory also stated that they have not filed any declaration to the Department nor did they get themselves registered with the Department for manufacture of shoe uppers. 4. The appellant was categorical in their stand that they have not removed and sold shoe uppers in the local market and they have made sales only to M/s.Metro & Metro without payment of Excise duty as they thought that the shoe uppers would be used in the manufacture and export of full shoes and therefore, they were not liable to pay duty. 5. Show cause notice dated 20.10....
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....; by complying Section 5(3) of Central Sales Tax Act, 1956. 17. But, their clearance of shoe-uppers to M/s.Metro & Metro was an inter-state sale on payment of central sales tax as per proviso to section 6 of Central Sales Tax Act, 1956, and it was not the clearance of goods as per section 5(3) Central Sales Tax Act, 1956. 18. Hence, their contention that they have not merely followed the procedures prescribed under Notification No.43 of 2001 does not have any basis as (i) they did not produce any documentary evidence to show that their goods were used in the manufacture of final goods that were finally exported. (ii) they cleared the shoe-uppers in the course of inter-state sale on payment of central sales tax which is normal practice for sale of goods with in the country and not the sale of goods that were meant for the use in manufacture of export goods. 19. In the case of Jay Engg. Works Limited Vs. CCE 2001 (137) ELT 454, there was no doubt about the clearance of goods for job work, but there was only the procedural of lapses in following chapter X procedures and question of unjust enrichment. 20. In ....
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....r finished goods, i.e. shoes, which were ultimately exported. 11. The appellate authority by its order dated 28.11.2008, rejected the appeal, holding as under:- 7.6 During the Personal Hearing, the Id.Counsel for the appellant stated that they would submit proof of the export for the goods. Subsequently, he submitted the proof of export and the sworn affidavit of Shri. Hari Ram Kalsi, Partner of M/s.Metro & Metro dated 31.03.2006 for having utilized the shoe uppers purchased from the appellants in their finished goods viz., shoes, which were ultimately exported by them. As already stated, the appellant had not observed any conditions or followed any procedures stipulated in the said Notification, while clearing the goods. The very purpose of such procedure is in order to ensure that it is very same uppers that were used in the exported shoes. Non observance of such procedure has landed the appellant in a position where he cannot prove by acceptable evidence and proof that the goods he had cleared from the factory were the very ones used in the manufacture of the final products that were exported. An affidavit under such circumstances cannot be considered as an acceptabl....
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....ith. b) Whether the Tribunal is right in upholding the confirmation of demand of duty by invoking extended period under proviso to Section 11A of CEA in the absence of any intent to evade payment of duty on the part of the appellant. 15. Heard Mr.S.Jaikumar, learned counsel appearing for the appellant and Ms.Hema Latha, learned Standing Counsel appearing for the Department and perused the materials on record. 16. The principle contention of the appellant is that when the Tribunal had come to the conclusion that all the leather uppers manufactured by the appellant and sold to M/s.Metro & Metro had been exported and that there is no finding that these goods were sold in the local market, the appellant should not be made to pay duty on the goods. It was contended that failure to adhere to the procedures, which enable them to avail benefit from payment of duty, is only a procedural lapse and that since the goods have been exported, no excise duty is payable by them. 17. Rule 19 of the Central Excise Rules, 2002, deals with exports without payment of duty. Rule 19 of the Central Excise Rules, reads as under: 19. Export without payment of duty (1) Any excisa....
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....t of such goods. He may, if necessary, call for samples of finished goods or inspect such goods in the factory of manufacture for verifying the declarations. He shall, after being satisfied about the correctness of declarations, countersign the application in the manner specified in the Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacturer of Excisable Goods) Rules, 2001; (v) The manufacturer or processor may remove the excisable goods so received as such or after these have been partially processed during the course of manufacture or processing of finished goods to a place outside the factory- (a) for the purpose of test, repairs, refining, reconditioning or carrying out any other operation necessary for the manufacture or processing of the finished goods and return the same to his factory without payment of duty for further use in the manufacture or processing of finished goods or remove the same without payment of duty in bond for export, provided that the waste, if any, arising in the course of such operation is also returned to the said factory of the manufacture or processing; or (b) for the purpose of manufacture of interme....
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....nce of procedure cannot be said to be a mere procedural lapse. The appellant has not fulfilled any of the conditions. Merely stating that they have not paid the Central Excise Duty as they felt that they would be used by M/s.Metro & Metro for export purposes would not be sufficient. The authorities have to get satisfied that the goods cleared were the one, which were actually used for export. 22. It is well settled that the stringency and the mandatory nature of any notification is decided on the basis of the purpose it seeks to achieve. The purpose of Notification No.43 of 2001 dated 26.06.2001 is to ensure that excise duty should not be evaded under the garb of export sales. The Hon'ble Apex Court in Indian Aluminium Company Limited Vs. Thane Municipal Corporation reported in 1992 Supp (1) SCC 480 in paragraph No.6 at page No.488 and paragraph No.3 at page No.485, has observed as under:- "6.........There is an understandable reason for the stringency of the provisions. The object of S. 5(2) (a) (ii) of the Act and the rules made thereunder is self-evident. While they are obviously intended to give exemption to a dealer in respect of sales to registered dealers'....
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.... file the necessary declaration has necessarily prevented the authorities to have a proper verification." The Hon'ble Apex Court in Kedarnath Jute Manufacturing Co. Vs. CTO reported in (1965) 3 SCR 626 at page No.630 has observed as under:- It can thus be seen that the submission namely that the dealer, even without filing a declaration, can later prove his case by producing other evidence, is also rejected. This ratio applies on all fours to the case before us. As already mentioned the concession can be granted only if the raw material is used in the industrial undertaking seeking such concession. For that a verification was necessary and that is why in the rule itself it is mentioned that a declaration has to be filed in Form 14 facilitating verification. Fail- ure to file the same would automatically disentitle the Company from claiming any such concession. 23. The learned counsel appearing for the appellant has placed reliance on a judgment dated 12.06.2017 passed by the Division Bench of this Court in C.M.A.No.3044 of 2011, wherein, this Court observed as under:- 13. Therefore, what emanates from the facts obtaining in the present case is that, ther....