TaxTMI 
TaxTMI 
2022 (11) TMI 1538
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.... Excise Act, 1944 3. I impose a penalty of Rs. 7,25,34,077/- (Rupees Seven crore twenty five lakhs thirty four thousand seventy seven only) under the provisions of Section 11AC(a) (erstwhile 11AC) of the Central Excise Act 1944. 4. I impose a penalty of Rs. 5,00,000/- (Rupees Five lakh only) on M/s.JMCIPL under the provisions of Rule 25 of the Central Excise Rules, 2002 5. I impose a penalty of Rs. 1,00,000/- (Rupees One lakh only) on Shri. Amit Burman under the provisions of Rule 26 of the Central Excise Rules, 2002 6. I do not order confiscation of the impugned goods, as they are not available for confiscation. Consequently, I also do not impose any fine in lieu of confiscation of the goods." 2.1 Appellant are engaged in the manufacturing of Nickel Catalyst falling under Tariff Item 3815 11 00 and 3815 1210 of the First Schedule to the Central Excise Tariff Act, 1985. 2.2 Intelligence received, by the Officers of the Hqrs. Preventive Section of Central Excise, Belapur Commissionerate indicated that appellant were misutilising the Advance Licence Scheme by mis- declaring their export goods as Catalysts of Palladium and Platinum, thereby im....
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....atalyst- Type 900, Catalyst. Powder (10% Palladium on Carbon/Charcoal), Catalyst Paste (10% Palladium on Carbon/Charcoal), Catalyst Type 10T487 Paste (10% Palladium on Carbon/Charcoal), etc. There was no mention of "Ash and residues" in the said Daily Stock Register (DSA). Therefore, the "Ash and residues" which actually were exported were not accounted for in the Daily Stock Register (DSA) which was in contravention of the provisions of Rule 10 of the Central Excise Rules, 2002, thereby rendering the goods exported liable to confiscation under Rule 25 of the Central Excise Rules, 2002. The details of all such exported goods mis-declared by M/s. JMCIPL as "Palladium/Platinum supported catalyst", detailed in Annexure-C to the show cause notice, were thereby liable to confiscation under Rule 25 of the Central Excise Rules, 2002. Therefore appellant were also liable for penal action under Rule 25 of the Central Excise Rules, 2002. 2.11 A show cause notice dated 30.08.2012 asking them to show-cause to the Commissioner of Central Excise, Belapur Commissionerate having office located at 1st Floor, CGO Complex, CBD Belapur, Navi Mumbai-400 614. as to why 1) the rebate of Centr....
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....d)] ➢ The impugned order travels beyond the scope of the show cause notice in alleging that the goods mentioned in the documents were not exported. ➢ Ash/residue containing precious metal, generated during the process of recharging spent catalyst are not manufactured goods and therefore not liable to excise duty, hence the demand made under Section 11A is not maintainable. o Indian Aluminium Co. [1980 (6) ELT 146 (Bom)] o Tata Iron & Steel Co. Ltd. [2004 (165) ELT 386 (SC)] o Dhakad Metals [2010 (257) ELT 535 (Guj.)] affirmed in [2010 (257) ELT A139 (SC)] o Hindalco Industries [2015 (315) ELT 10 (Bom)] ➢ The recovery of erroneous refund is incorrect as excise duty is not leviable on exports. o Chhotabhai Jethabhai Patel & Co. [1999 (110) ELT 118 (SC)] ➢ Extended period of limitation cannot be invoked ➢ As the demand cannot be sustained on merits and limitation there can be no question for imposition of fine and interest on the appellants. o Tirupati Udyog [2011 (272) ELT 209 (AP)] 3.3 Arguing for the revenue learned special counsel while reiterati....
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....r the rebate of excise duty sanctioned on the mis-declared goods was in order or not. iii. Whether extended period can be invoked or not. iv. Whether the goods are liable for confiscation or not. Also whether penalty is liable to be imposed for the mis- declaration with intention to avail erroneous rebate. v. Whether penalty is imposable for not accounting the export product "Ash and Residues" in the daily Stock Register under Rule 25 of the Central Excise Rules, 2002 vi. Whether penalty is imposable on Shri Amit Burman, General Manager(Process Catalyst) under Rule 26 and/or Rule 27 of the Central Excise Rules, 2002 30. Regarding the point (i) stated above, I find that L M/s. JMCIPL in all their export documents viz ARE1, shipping bills, bill of lading, mate receipt and the Invoice issued under Rule 11 of the Central Excise Rules, 2002, had declared the description of their product exported as "Platinum/Palladium supported catalyst" ranging from 1.5% to 10% i.e. the percentage of metal content in the said catalyst. However, the internal records in the form of Assay Analysis Reports clearly establish that the good exported were "Ashes and....
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....en if there was a mis- declaration whether M/s. JMCIPL were entitled to rebate of the duty paid on the mis-declared goods or not. I find that M/s. JMCIPL had exported the goods in terms of Rule 18 of Central Excise Rules, 2002 read with Notification No. 19/2004- CE(NT) dated 6.9.2004, as amended from time to time. Rule 18 of the Central Excise, 2002 read with the Notifications issued under the said rule, provides for granting of rebate of duty paid on such excisable goods which are exported. M/s. JMCIPL had claimed rebate of duty paid on "Platinum/Palladium supported Catalyst" which was shown to have been exported vide the 27ARE1s. However, investigations conducted by the department has proved that the goods actually exported were "Ash and residues" and not "Platinum/Palladium supported catalyst". This fact has not been disputed by M/s. JMCIPL. "M/s. JMCIPL had claimed rebate of duty paid on goods. which were never exported Under Rule 18 what is rebated is the duty paid on the goods exported. In this case, it has been proved beyond doubt that the goods exported was not 'Palladium/Platinum supported catalysts'. The goods actually exported was 'Ash and Residues'. Ther....
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....find that M/s. JMCIPL had deposited the duty on the goods imported duty free against the Advance Licences due to mis-declaration of the export products along with interest and 25% penalty amounting to Rs. 11.66 crores. M/s. JMCIPL had stated in their reply that on the basis of internal review, they found out that they had mis declared/ misclassified the export product as "Platinum/ Palladium supported catalyst" instead of "Ash and Residue". However I find from the records that the Preventive Officers of Belapur Commissionerate had booked a case against M/s. JMCIPL in the month of March 2011 and during the course of investigation statement of Shri B.K.Srivastava, Deputy Operations Manager of M/s. JMCIPL was recorded on 17.3.2011, wherein he admitted the fact that the goods exported were actually ash mixed with impurities containing less than 5% metal content and not "Platinum/Palladium supported catalyst". It was only subsequent to 'the visit of the Preventive Officers and when the investigation was in progress that M/s. JMCIPL approached the Customs Department vide their letter dated 13.4.2011 and paid the Customs duty along with interest and 25% penalty amounting to Rs. 11.66 ....
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....as 2% palladium supported catalyst Type 900. Catalyst powder (10% palladium on Carbon/ Charcoal), Catalyst Paste (10% Palladium on Carbon/Charcoal), Catalyst Type10T487 Paste (10% Palladium on Carbon/Charcoal) etc. There was no mention of "Ash and residues" in the said Daily Stock Register. Rule 10 of the Central Excise Rules, 2002, provides that every assessee shall maintain proper records on a daily basis in a legible manner indicating the particulars of the goods produced or manufactured, opening balance, quantity produced or manufactured, inventory of goods, quantity removed, assessable value, the amount of duty payable, and particulars regarding amount of duty actually paid. Though M/s. JMCIPL had produced and exported "Ash and Residues" the same were not entered/accounted for in the Daily Stock Register maintained by them which is a clear contravention of the provisions of Rule 10 of the Central Excise Rules, 2002 and as such M/s. JMCIPL are liable for penal action under Rule 25 of the Central Excise Rules, 2002 35. ..... 4.3 The basic principle which govern the export of the goods from one jurisdiction to another is that "goods are exported and not the taxes and ....
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....h the authority find to be the most convenient and the most lucrative, wherever it maybe; but that is a matter of the machinery of collection, and does not affect the essential nature of the tax. The ultimate incidence of an excise duty, a typical indirect tax, must always be on the consumer, who pays as he consumes or expends; and it continues to be an excise duty, that is, a duty on home-produced or home-manufactured goods, no matter at what stage it is collected." 4.4 To de-burden the goods of the excise duty paid in respect of the goods exported, Rule 18 of the Central Excise Rules, 2002 provide as follows: 18. Rebate of duty.- Where any goods are exported, the Central Government may, by notification, grant rebate of duty paid on such excisable goods or duty paid on materials used in the manufacture or processing of such goods and the rebate shall be subject to such conditions or limitations, if any, and fulfillment of such procedure, as may be specified in the notification. Explanation.-"Export" includes goods shipped as provision or stores for use on board a ship proceeding to a foreign port or supplied to a foreign going aircraft. In te....
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....t:- i. The manufacturer exporters registered under the Central Excise Rules, 2002 and merchant-exporters who procure and export the goods directly from the factory or warehouse can exercise the option of exporting the goods sealed at the place of dispatch by a Central Excise Officer or under self-sealing; ii. Where the exporter desires self-sealing and self- certification, the manufacturer of the export goods or owner of the warehouse shall take the responsibility of sealing and certification; iii. The merchant-exporters other than those procuring the goods directly from the factory or warehouse shall export the goods sealed at the place of dispatch by a Central Excise Officer; iv. For the sealing of goods intended for export, at the place of dispatch, the exporter shall present the goods along with four copies of application in the Form ARE-I specified in the Annexure to this notification to the Superintendent or Inspector of Central Excise having jurisdiction over the factory of production or manufacture or warehouse; v. The said Superintendent or Inspector of Central Excise shall verify the identity of goods mentioned in the applicati....
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....plicate and quadruplicate copies of the application to the Superintendent or Inspector of Central Excise having jurisdiction over the factory or warehouse within twenty four hours of removal of the goods; xii. In case of self-sealing, the said Superintendent or Inspector of Central Excise shall, after verifying the particulars of the duty paid or duty payable and endorsing the correctness or otherwise, of these particulars- a. send to the officer with whom rebate claim is to be filed, either by post or by handing over to the exporter in a tamper proof sealed cover after posting the particulars in official records, or b. send to the Excise Rebate Audit Section at the place of export in case rebate is to be claimed by electronic declaration on Electronic Data Inter- change system of Customs; xiii. On arrival at the place of export, the goods shall be presented together with original, duplicate and quadruplicate(optional) copies of the application to the Commissioner of Customs or other duly appointed officer; xiv. The Commissioner of Customs or other duly appointed officer shall examine the consignments with the particulars as cited in the....
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....may enter the requisite information in the shipping bill filed at such place of export, as may be specified by the Board, for claiming rebate by electronic declaration on Electronic Data Inter-change system of Customs. The details of the corresponding application shall be entered in the Electronic Data Inter-change system of Customs upon arrival of the goods in the Customs area. After goods are exported or order under section 51 of the Customs Act, 1962 (52 of 1962) has been issued, the rebate of excise duty shall, if the claim is found in order, be sanctioned and disbursed by the Assistant Commissioner of Customs or the Deputy Commissioner of Customs. (d) Special procedure for store for consumption on board an aircraft on foreign run:- ......" 4.4 Admittedly goods were exported as per the provisions of the Rule under claim for rebate by following the procedure as prescribed by the notification. Appellants had filed 27 ARE-1's against which the export goods were cleared by them and subsequently after export of the said goods the rebate claims were filed in the prescribed manner. These rebate claims were allowed in their favour. There is no dispute that the goods which w....
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....ms of Rule 19 of the Central Excise Rules, 2002. Rule 18 and 19 of the Central Excise Rules, 2002 are akin to Rule 12 & 13 of the erstwhile Central; Excise Rules, 1944 and prescribed the procedure for export of the excisable goods. Though Show Cause Notice records the details of the export made in terms of Rule 19, no further action is proposed in respect of the exports made under the Rule 19. Not even a proposal for penalty has been made for the misdeclaration alleged. In case of Hindustan Petroleum Corporation [1995 (77) E.L.T. 256 (S.C.)] Hon'ble Supreme Court observed as follows: 12. A mere look at Rule 12 shows that it will cover those excisable goods which have already been subjected to payment of excise duty but which are subsequently exported outside India. On proof of fulfilment of conditions laid down by Rule 12, the concerned exporter of such goods will be able to get rebate as per the terms and conditions laid down by the notification issued by Central Govt. under sub- rule (1) of Rule 12. So far as Rule 13 is concerned, other excisable goods mentioned in the rule may in the like manner meaning thereby as prescribed by Rule 12, can be exported without payment o....
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....nge to the country. It is not as if under Rule 13 excisable goods which are subjected to export directly from the warehouse of licenced factory do not incur any excise duty. That is contra indicated by the requirement of Rule 13 itself calling upon the exporter to enter into a bond for payment of requisite full duty in case the situation arises for the same and that bond is not to be discharged and the obligation under the bond has to continue for the benefit of revenue till proof of export is made available to the satisfaction of the Collector. The appellants' contention that Rule 13 is independent of Rule 12, therefore, cannot be accepted." 4.8 In case of Ravi Foods Pvt Ltd [2018 (16) G.S.T.L. 80 (A.P.)] Hon'ble Andhra Pradesh High Court observed as follows: "25. In Commissioner v. Suncity Alloys Pvt. Ltd. - 2007 (218) E.L.T. 174 (Raj.), a Division Bench of the Rajasthan High Court was concerned with a claim for rebate of duty, on the goods exported by the assessee. The Revenue raised a similar contention as they have raised now to the effect that the goods were exempt from payment of duty and that therefore the amount paid by the assessee cannot be treated as duty pa....
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....mission assembly and sheet metal components referred together as aggregates, classifiable under Chapter 84 & 87 of Central Excise Tariff which are exempted from payment of Central Excise duty vide Notification No. 6/2002-Central Excise, dated 1-3-2002. However applicants choose to pay duty on part of tractors (aggregates) on their own volition. They subsequently exported tractors and filed application of fixation of brand rate of drawback in r/o duty paid on such aggregates. The original authority rejected their drawback brand rate fixation application on the grounds that 'aggregates' being part of tractors are exempted from payment of duty vide Sr. No. 295 and 296 of the Notification No. 6/2002-C.E., dated 1-3-2002, as amended and duty was not required to be paid. The applicant preferred appeal against the impugned Order-in-Original before the Commissioner (Appeals), who rejected the same by upholding the impugned Order-in-Original. 9. Government observes that in this Revision Application, the applicant has mainly contended that the Commissioner (Appeals) in their earlier order dated 14-7-2009 specifically held that duty was payable on such aggregates and hence Commission....
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....bmitted that the duty exemption available against Sr. No. 92 is conditional because there is the condition that they are to be captivity consumed in the manufacture of tractor. In this regard Government, observes that such condition is not provided under column (5) of the said Notification No. 6-2006-C.E. The exemption is available to all goods captively consumed. Hence the exemption contained in the Notification No. 6/2006-C.E. at 1-3-2006 (Sr. No. 92) being absolute and unconditional is rightly covered under Section 5A (1A) of Central Excise Act, 1944 and manufacturer has no option to pay duty on said exempted goods. Under such circumstances, the availment of duty exemption was mandatory in terms of Section 5A (1A) of the Central Excise Act, 1944 and no duty was payable on aggregate part of tractors. The applicants have also pleaded that the appellate authority had taken a view which is contrary to his Order-in-Appeal dated 14-7-2007. In this regard Government observes that the appellate authority decided the issue of interest payment on duty in their order dated 14-7-2007 and not dutiability of aggregates. No specific question of dutiability on aggregates has been dealt by the a....
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....s for recovery of erroneous refund in terms of Section 11A by invoking the extended period of limitation cannot be sustained. The judicially pronounced order could have been set aside only in appellate proceedings before the appropriate authority. Hon'ble Guwahati high Court has in case of Topcem India [2021 (376) E.L.T. 573 (Gau)] held as follows: "67. The Officers of the Central Excise Department exercise Quasi judicial functions. The orders passed by the Department Officers being in exercise of Quasi Judicial powers cannot be co- laterally revoked/reviewed except when permitted under the Statute. It is seen that against sanction orders passed the concerned officers, the statute does not provide for any review of such order passed. However, under Section 35, there is a provision for appeal, which however has not been resorted to by the Department seeking revocation/recall of orders already passed sanctioning the refund in terms of "M/s. SRD Nutrients (supra)". The refund orders passed cannot be unilaterally revoked by application of Section 11A unless the requirements of sub-section (4) of Section 11A are satisfied. This will amount to impeaching collaterally a finding r....
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....hts of subjects and a duty to act judicially, such body of persons constitute a quasi-judicial body and decision given by them is a quasi-judicial decision. It would also be a quasi-judicial order if the statute empowers an authority to decide the lis not between the two contesting parties but also when the decision prejudicially affects the subject as against the authority, provided that the authority is required by the statute to act judicially. Further, what differentiates an administrative act from the quasi-judicial act is that a quasi- judicial body is required to make an enquiry before arriving at a conclusion. In addition, an administrative authority is the one which is dictated by policy and expediency whereas a quasi- judicial authority is required to act according to the rules. 24. The opinion/order of the Tribunal, or the order passed by the Registering Authority based upon the opinion of the Foreigners Tribunal, as the case may be, can be challenged by way of writ proceedings. Thus, it would be incorrect to hold that the opinion of the Foreigners Tribunal and/or the consequential order passed by the Registering Authority would not operate as res judicata. Both....
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.... notwithstanding the earlier opinion expressed by the Foreigners Tribunal is far- fetched, and completely unacceptable. The plea is fallacious and has no merit. This contention therefore must be rejected and fails. 27. As stated above, a person aggrieved by the opinion/order of the Tribunal can challenge the findings/opinion expressed by way of a writ petition wherein the High Court would be entitled to examine the issue with reference to the evidence and material in the exercise of its power of judicial review premised on the principle of "error in the decision-making process" etc. This serves as a necessary check to correct and rectify an "error" in the orders passed by the Tribunal." 4.12 Hon'ble Allahabad High court has in case of Honda Siel Power Product [2020 (372) ELT 30 (ALL)] held as follows: "35. Thus, Section 11B assumes great significance, as any order of refund of excise duty and interest is made only after the adjudication as envisaged under scheme of Section 11B. In the present case, petitioner-company had made an application for refund which was adjudicated on 5-11-2015 and it was directed to refund excise duty to tune of Rs. 1,02,75,633/- which....
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.... the present case, order of refund was never taken to higher forum and it became final. 40. Decisions relied upon by the counsel for the revenue in case of Jain Shudh Vanaspati (supra) relates to proceedings which were vitiated by fraud. Further, the Apex Court recorded a clear finding that goods were cleared for home consumption under Section 47 of the Act, by playing fraud upon the Department. Therefore, the Court held that fraud vitiates all solemn Acts, while in present case department has not alleged any fraud upon the petitioner-assessee. 41. Further reliance placed by counsel for revenue on the decision of Addison and Company (supra), wherein it was held that recovery under Section 11A can be made where excise duty was refunded erroneously, but the Apex Court had also held that where the incidence of duty was not passed on and the assessee had borne burden of duty, thus he was entitled for the refund. Thus, both the cases relied upon by the department are not applicable in the present case, as it is neither a case of fraud, nor where incidence of duty was passed on. 42. Secondly, the argument of alternative remedy under Section 35 is concerned, the....