TaxTMI 
TaxTMI 
2020 (1) TMI 636
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....2) Rules, 2001 and the provisions of Notification No 42/2001 CE(NT) dtd 26.06.2001 and the procedure laid down thereto. (iii) The Merchant Exporter should also pay the interest as appropriate on such duty from the date of removal for export from the place of procurement till the date of payment of duty in terms of B-1 bond (General) read with clause 2(v)(b) of Notification No 42/2001 CE (NT) dtd 26.06.2001 as amended, read with Section 11 (AB) of C Ex Act, 1944. (iv) I impose a penalty of Rs. 75,00,000/- (Rupees Seventy Five Lakhs only) on M/s Shivnath Rai Harnarain (India) New Delhi under the provisions of Rule 26 of Central Excise (No 2) Rules, 2001. 2.1 Appellant is a Merchant Exporter having "Star Trading House" status. He has executed B-1 bond, as indicated in table below for removal of sugar for export from various factories located in various jurisdiction. Since they are "Star Trading House", the bonds were executed without any security. The quantum of sugar removed for export and quantum of duty involved on such removals is also as indicated. Appellant was not able to produce the "proof of export " within the period as prescribed in respect of the goods....
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..../-. Against this order Appellant preferred the appeal before CESTAT along with the application for pre-deposit in terms of Section 35F. CESTAT vide its order No 5/654/207/CI(EB) dated 03.09.2007 directed them to make a pre-deposit of Rs. 50 Lakhs. Against this order of CESTAT, appellant filed appeal before Mumbai High Court. Mumbai High Court has vide its order dated 29.02.2008 held as follows: "2. Similarly by another order of 31st December, 2005 pertaining to another sugar factory (in respect of other than 3 sugar factories which are subject matter of the earlier appeal) set aside the order with the direction to obtain decision of the Board and thereafter to proceed in the matter. 3. The Board thereafter by its Order No. 17/2006-Central Excise dated 16th June, 2006 directed consolidation of four show cause notices as set out in the order. Grievance of the petitioners is that the Board has not consolidated all the show cause notices which were required to be consolidated so that an effective order could be passed. We now find that in respect of the show cause notice issued to M/s. Sant Tukaram S.S.K. Ltd., Kasarsai it is kept in the D.C. Pune Division an....
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....ant Tukaram SSK and Daulat SSK. Since no notice was issued in respect of the clearance made from Daulat SSK, the show cause notice issued in respect of Sant Tukaram SSK was also taken up for hearing and adjudication by the Commissioner Central Excise Pune-II. 2.5 Since the main grievance of the appellants in earlier proceedings before all the authority was that during the period under consideration they had exported sugar cleared not only from these unit, but from 13 units located in Maharashtra, and hence the clearances made from all the thirteen units should be taken into record and reconcile. Accordingly Commissioner has considered the documents pertaining to all the 13 units. He records in para 3 of the order as follows: "I have considered the documents pertaining to the clearances of sugar from all the 13 units mentioned by M/s SRH while passing the order." 2.6 Commissioner ahs in para 5 of the impugned order recorded as follows: "5 The above five show cause notices are issued because of irreconcible deficiencies and discrepancies between the various documents namely AR-4/ARE-1, Shipping Bill, Bill of Lading, Invoices, Bank Realization Certificate etc. which ....
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....ed by the Customs Officer at the port of export. In some cases ARE-1s are perfectly correct and in some cases the endorsements are made under which the quantity cleared from factories under relevant ARE-1s an SBs do not tally. However the fact is that these ARE-1s were produced before the Custom Officer hand have been duly endorsed by him certifying the actual export. • Whatever goods were cleared for Mumbai Port under ARE- 1s of different Sugar Mills were ultimately exported under 198 SBS (197 from Mumbai + 1 from Amritsar under which destination has been changed to Pakistan). On comparison of the gods cleared under these ARE-1s and exported under 198 Shipping Bills, only the 272 MT cannot be reconciled (approx 220 Grams per Quintal) which is due to handling wastage during re-packing of the same. • Band Realization Certificate (BRC) has also been produced in respect of 196 SBs and only in respect of two SBs accounting for 350 MT the BRC are not available and not produced. • Demand has been confirmed under Annexure "A" of impugned OIO on the basis of non production of Original copy of Original and Duplicate ARE-1s, photocopies of same duly by ....
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.... them. In case of Formica India [1995 (77) ELT 51 (SC), Hon'ble Supreme Court held "Once the Tribunal took the view that they were liable to pay duty on the intermediary product and they would have been entitled to the benefit of the notification had they met with the requirement of Rule 56A, the proper course was to permit them to do so rather than denying to them the benefit on the technical ground that the point of time when they could have done so had elapsed and they could not be permitted to comply with Rule 56A after that stage had passed." • They would also rely on the decisions as follows in their support • Continental Cement Company[2014 (309) ELT 411 (ALL)] • Arya Fibres Pvt Ltd [2014 (311) ELT 529 (T-Ahmd)] • Model Buckets & attachments (P) Ltd [2007 (217) ELT 284 (T-Bang)] affirmed at {2014 (300) ELT 510 (Kar)] • They are in possession of SBs and BRC evidencing the exports. Adjudicating authority has himself recorded that the goods were repacked at the port, thus admits that the goods had reached the port. • Hon'ble Apex Court has in case of Suksha International & Nutan Gems & Anr [1989 (39) ....
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....€¢ Rajasthan Spinning and Weaving Mills Ltd [1995 (77) ELT 474 (SC)] • Dilip Kumar & Company [2018 (361) ELT 577 (SC)] • Hon'ble Supreme Court has in case of Mihir Textiles Ltd [1997 (92) ELT 9 (SC)] held as follows: "..... This is not a case where a certain provision is mandatory or directory. Here the question is whether concessional relief of duty which is made dependent on the satisfaction of certain conditions can be granted without compliance of such conditions. No matter even if the conditions are only directory." • In view of the above submissions there is no merits in the submissions made by the appellants to the effect that the benefit of exemption under Notification No 42/2001-CE (NT) should be admissible to them by tallying the entire quantity exported against the Shipping Bills produced by them which tallies with the total quantity of sugar cleared from the 13 different sugar mills located in Maharashtra. 4.1 We have considered the impugned order along with the submissions made in appeal, during the course of arguments and in written submissions filed. 4.2 The three annexures as per which the demand has been con....
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....ing bill No 5145341 dated 04.06.2001 indicated that the shipment of the consignment on 11.06.2001. The Mate Receipt No 46 dated 21.06.2001 indicated the date of receipt of the consignment on Board the vessel on 21.06.2001. 4 8/25.06.2001 651 5,53,350 The actual removal of the sugar from the registered factory was on 25.06.2001 whereas the relevant shipping bill No 5145160 dated 04.06.2001 indicated that the shipment of the consignment on 08.06.2001. The Mate Receipt No 46 dated 21.06.2001 indicated the date of receipt of the consignment on Board the vessel on 16.06.2001. 5 21/24.07.2001 198.7 1,68,895 The shipping bill No 5157333 dated 26.07.2001 and 5153885 dated 10.07.2001 indicated that the sugar was originally procured from the jurisdiction of Division VII of Pune - I Commissionerate and as per the details available on shipping bill No 5153885 dated 10.07.2001 the actual shipment was taken place on 12.07.2001. The relevant Mate Receipt No 3701 dated 17.07.2001 indicated the date of receipt of the consignment on Board the vessel on 17.07.2001. 6 25/29.07.2001 922.7 7,84,295 The actual removal of the sugar from the registered factory w....
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....indicated that the sugar was originally procured from the jurisdiction of Division VI Hyderabad - I Commissionerate 2 12/04.08.2001 331 2,81,350 The actual removal of sugar from the registered factory was on 04.08.2001 whereas the relevant shipping bill Nos 5140660 dated 16.05.2001 indicated that the shipment of the consignment on 26.07.2001. Further the relevant shipping bill indicated that the sugar was originally procured from the jurisdiction of Division I Hyderabad - I Commissionerate 3 13/05.08.2001 433 3,68,050 The actual removal of sugar from the registered factory was on 05.08.2001 whereas the relevant shipping bill Nos 5140660 dated 16.05.2001 indicated that the shipment of the consignment on 26.07.2001. Further the relevant shipping bill indicated that the sugar was originally procured from the jurisdiction of Division I Hyderabad Commissionerate 4 14/06.08.2001 228.9 1,94,565 The actual removal of sugar from the registered factory was on 06.08.2001 whereas the relevant shipping bill Nos 5140660 dated 16.05.2001 indicated that the shipment of the consignment on 26.07.2001.Furt her the relevant shipping bill indicated that the ....
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....00 20/ 17.5.01 312 30.8.01 Hyderabad 24/ 19.5.01 201.5 18 5158702/ 1000 21/ 17.5.01 656 1.8.01 A'Nagar/ A'Bad 22/ 18.5.01 284 19 5154610/ 13.7.2001 900 23/ 18.5.01 49.7 30.8.01 -- 31/ 23.5.01 234 35/ 26.5.01 247 20 51406662/ 16.5.2001 1000 25/ 20.5.01 237 25.6.01 -- 26/ 20.5.01 384 28/ 21.5.01 298 29/ 22.5.01 105 40/ 30.5.01 35 42/ 31.5.01 25.2 21 5150869/ 27.6.2001 230 27/ 21.5.01 187 10.7.01 Sholapur/ Pune 22 5162519/ 18.8.2001 1000 30/ 22.5.01 483 18.4.01 Sholapur/ Pune 23 5150868/ 27.6.2001 230 18/ 16.5.01 262 10.7.01 Sholapur/ Pune 19/ 16.5.01 596 32/ 24.5.01 46 34/ 25.5.01 223 Total Quantity Removed for Export: 12500 MT Duty Involved Rs. 1,06,25,000/- 4.3 The goods are allowed clearance from the factory of manufacturer for exports in terms of Rule 13 of Central Excise Rules, 1944/ Rule 19 of Central Excise Rules, 2001. The Rule 13 of Central Excise Rules, 1944 is pari materia to Rule 19 of Central Excise Rules, 2001. The said rule reads as follows: "19. E....
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....as the Assistant Commissioner of Central Excise or Deputy Commissioner of Central Excise or Maritime Commissioner may in any particular case allow; 3. that when the export is from a place other than registered factory or warehouse, the excisable goods are in original packed condition and identifiable as to their origin; 4. that exports of mineral oil products falling under Chapter 27 of the First Schedule to the Central Excise Tariff Act, 1985 (5 of 1986) as stores for consumption on board of an aircraft on foreign run shall be subject to conditions and limitations, to be applied mutatis mutandis, as notified in the Ministry of Finance (Department of Revenue), Notification No.40/2001-Central .Excise (N.T.) dated 26th June, 2001 issued under rule 18 of Central Excise (No.2) Rules, 2001. 2. Procedure: - (i) Procedure for removal without payment of duty under this notification: - (a) After furnishing bond, a merchant-exporter shall obtain certificates in Form CT-1 specified in Annexure-III issued by the Superintendent of Central Excise having jurisdiction over the factory or warehouse or approved premises or Maritime Commissioner or such ot....
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....application to satisfy himself about the exportability thereof and if the seals are found intact, he shall allow export. (g) The Commissioner of Customs or the other duly appointed officer shall return the original and quadruplicate (optional copy for exporter) copies of application to the exporter and forward the duplicate copy of application either by post or by handing over to the exporter in a tamper proof sealed cover to the officer specified in the application, with whom the exporter has furnished bond or a letter of undertaking. (h) The exporter shall use the quintuplicate copy for the purposes of claiming any other export incentive. (v) Cancellation of applications: (a) ..........; (b) .......... (vi) Procedure in respect of exported goods subsequently re-imported and returned to the factory: (a) ........ (b) ......... Explanation I. - For the purpose of this notification, "merchant-exporter" mean any exporter who procures and exports excisable goods manufactured by any other person. Explanation II. - ........ 4.5 Appellants herein are merchant exporters and have cleared the goods (....
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....e to look to other supporting material, especially in taxation statutes. Indeed, it is well-settled that in a taxation statute, there is no room for any intendment; that regard must be had to the clear meaning of the words and that the matter should be governed wholly by the language of the notification. Equity has no place in interpretation of a tax statute. Strictly one has to look to the language used; there is no room for searching intendment nor drawing any presumption. Furthermore, nothing has to be read into nor should anything be implied other than essential inferences while considering a taxation statute. 27. Now coming to the other aspect, as we presently discuss, even with regard to exemption clauses or exemption notifications issued under a taxing statute, this Court in some cases has taken the view that the ambiguity in an exemption notification should be construed in favour of the subject. In subsequent cases, this Court diluted the principle saying that mandatory requirements of exemption clause should be interpreted strictly and the directory conditions of such exemption notification can be condoned if there is sufficient compliance with the main requiremen....
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....astava, 1958 SCR 533, wherein their Lordships were considering the implication of non-compliance with the conditions provided in Article 320(3) of the Constitution on an order imposing punishment to a Government servant without reference to the Public Service Commission. While considering that question learned Judges made a reference to the Privy Council decision in Montreal Street Railway Company v. Normandin - AIR 1917 PC 142 and the Federal Court decision in Biswanath Khemka v. Emperor - AIR 1945 FC 67. The Constitution Bench held that the provisions of Article 320(3) are not mandatory and non-compliance of those provisions does not afford any cause of action in a court of law. Privy Council in the above quoted decision has observed that the question whether provisions in a statute are directory or imperative depends upon the object of the statute and no general rule can be laid down. "When the provisions of the statute relate to the performance of a public duty and the case is such that to hold null and void acts done in neglect of this duty would work serious general inconvenience or injustice to persons who have no control over those entrusted with the duty and at the same ti....
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....8 lacs, the Petitioner has averred that the goods were loaded by the Shipping Line on the vessel and the vessel sailed on 18 April, 2008 whereas the Let Export Order was passed by the customs authorities on 19 April, 2008. The Petitioner has stated that in view of this position the customs authorities withheld the endorsement of the ARE-1 forms and the issuance of the export promotion copy of the shipping bill [Paragraphs 8(g) and 8(h) of the petition]. We find merit in the contention of counsel appearing on behalf of the Revenue that in these circumstances, the rejection of the rebate claim dated 8 April, 2009 by the adjudicating authority and which was confirmed in appeal and in revision cannot be faulted. Admittedly even accordingly to the Petitioner the goods came to be exported and the vessel had sailed on 18 April, 2008 even before a Let Export Order was passed by the customs authorities. The primary requirement of the identity of the goods exported was therefore, in our view, not fulfilled. In such a case, it cannot be said that a fundamental requirement regarding the export of the goods and of the duty paid character of the goods was satisfied. 16. However, it is e....
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....2003 (156) E.L.T. 777." 4.11 It is also a settled position that when law requires something to be done in particular manner then that has to be one in that manner only and all other method of doing are barred. Hon'ble Supreme Court has in case of Competent Authority vs Bangalore Jute Factory [(2005) 13 SCC 477] stated the law as follows: "..........It is settled law that where a statute requires a particular act to be done in a particular manner, the act has to be done in that manner alone. Every word of the statute has to be given its due meaning........." 4.12 Since the issue involved is not in respect of clandestine clearance, but is in respect of the non submission of proof of export to the satisfaction of the bond accepting authority the decision of Hon'ble Allahabad High Court in case of Continental Cables and tribunal in case of Arya Fibres and Model Buckets and Attachments relied upon by the appellant Counsel are distinguishable and not applicable. Since we find that decision of five member bench of Hon'ble Supreme Court in case of Dilip Kumar & Co applicable to present case we are not in position to accept the submissions made by the appellant counsel relyin....