Benefit of concessional rate of duty - availability thereof when goods used in premises other than registered premises

PJ/Case Laws/2010-11/1168

Case: Commr. of C. Ex., Chandigarh-I v/s J.C.T. Electronics Ltd

Citation: 2011(267) E.L.T. 41 (P&H)

Issue:- Imported goods cleared to a unit of assessee other than registered under Customs (Import of Goods at Concessional Rate of Duty for manufacture of Excisable Goods) Rules, 1996 but used for intended purpose – whether benefit of concessional rate of duty can be denied

Brief Facts:- Respondents are manufacturer of colour picture tubes and is registered with the Central Excise Department under Rule 3 of the Customs (Import of Goods at Concessional Rate of Duty for manufacture of Excisable Goods) Rules, 1996 so as to enable it to import various inputs/raw material at the concessional rate of duty. Respondent is liable to pay excise duty under the provisions of Chapter sub-heading No. 5840.11. In order to avail the concessional rate of duty, the respondent have been executing bonds from time to time as required under Rule 4(3) of the Rules wherein an undertaking has been given by them to observe all the provisions of Rules of 1966 and of the Customs Act, 1962.

Respondent imported various items vide different bills of Entry under Notification No. 13/97-Cus and 25/99-2000-Cus read with Rules of 1966. During audit, it was found that the respondent had not used the whole quantity of various goods imported at the concessional rate of duty but had removed certain imported items from its factory premises to another unit at Vadodara thereby, violating the provisions of the Rules of 1966 and had caused loss of custom duty to the exchequer. Show cause notices were issued to the respondent for recovery of the amount of custom duty along with interest and penalty.

The Adjudicating Authority confirmed the demand which was raised under Section 28 of the 1962 Act read with Rule 8 of the 1996 Rules and ordered recovery of the duty by enforcing the Bond executed under Rule 4 of the 1996 Rules. The respondent was also held liable to pay interest under Section 28AB. Penalty of the equal amount under Section 114A was also imposed.

Aggrieved by the said order, Respondent filed an appeal before the Commissioner (Appeals). The Commissioner (Appeal) set aside the order of Adjudicating Authority and allowed the appeal.

Revenue took the matter in appeal before the Tribunal. The Tribunal did not interfere with the findings of the Commissioner (Appeal) and dismissed the appeal. Aggrieved by the order of Tribunal, Revenue filed appeal before the High Court.

Reasoning of Judgement:- The High Court perused the order of the Commissioner (Appeals), wherein various factors were considered. The significant fact was that though the goods were purchased for use in the manufacture of colour picture tubes at their Mohali Unit, but due to closure of that unit, the respondent-company was not able to use the inputs and as such the same were diverted to their unit in Vadodra for the same purpose. This was done after giving proper intimation to the Department and the latter had never raised any objection to that being so done.

It was noted that the Tribunal also in its order had held that the only failure on the part of the importer was that it did not use the imported inputs in the factory premises registered with the Jurisdictional Assistant Commissioner, in terms of Rules 3 and 4 of the 1996 Rules and instead used the same for the intended purpose, in another unit of its factory with the approval of the Department. The Tribunal also found that the respondent cannot be denied a substantial benefit for its failure to follow a procedural condition condoned by the department.

The High Court found that the concurrent findings of fact by the Commissioner (Appeal) and the Tribunal were based on record and appreciation of all relevant considerations. No error or perversity found in the approach adopted by the Appellate Authorities warranting interference by this Court. No substantial question of law arises.

Decision:- Appeals dismissed.

**************

Comments

PJ/Case Laws/2010-11/1168

Post a Comment

Query