Whether demand sustainable on grounds that description of goods exported varied in Shipping Bill and ARE-1?

PJ/Case Laws/2012-13/1314

CASE: MAHINDRA & MAHINDRA LTD. V/S COMMISSIONER OF CENTRAL EXCISE, MUMBAI

CITATION: 2012 (285) E.L.T 88 (TRI. – MUMBAI)

BRIEF FACTS: The appellants, M/s. Mahindra & Mahindra Ltd., are the manufacturer of motor vehicles, tractors and parts thereof. They exported certain automobile parts under 12 shipping bills. The goods were cleared from the factory under Central Excise Supervision and sealing under ARE-1 procedure and these goods were exported through Mumbai port. There was a variation in the description of goods given in the ARE-1 and the shipping bills. Since the appellant exported the goods under DEPB scheme, in the shipping bill they gave the description relating to their product as given in the DEPB schedule whereas in the ARE-1, they had given the description as reflected in the excise records. Since there was a variation between the two, the excise authorities were not satisfied with the proof of export and demanded excise duty amounting to Rs. 4,15,740/-. The appellant preferred an appeal before the Commissioner (Appeals), who dismissed the appeal. Hence, the appellants are before CESTAT.

APPELLANT’S CONTENTION: Shri S.S. Chari, Dy. General Manager (Excise) of the appellant-firm,submitted that there is a co-relation available between the various export documents, namely, the shipping bill and the documents for clearance from the factory, namely ARE-1. In every shipping bill, the ARE-1 number and date under which the goods are cleared for export is clearly mentioned and from this it can be easily co-related whether the goods cleared under ARE-1 have been exported or not. In respect of two such shipping bills, he explained how the correlation is made. He, therefore, submitted that the argument of the department that the proof of export has not been furnished is not sustainable in law and requested for allowing the appeal.

RESPONDENT’S CONTENTION:Ld. AR appearing for the Revenue reiterated the findings given by the lower authorities.

REASONING OF JUDGEMENT: The examination and export sealing has been done at the factory gate by the jurisdictional Excise authorities and the ARE- 1 gives the description of the goods, which are covered by the export consignments. The ARE-1 number and date are indicated in the corresponding shipping bills under which the goods have been exported. The Customs have not examined the goods but based on the Central Excise examination, they have allowed the goods to be exported. The shipping bills contain the endorsement that the goods exported are covered by the ARE-1 number and date indicated therein. Thus there is clear correlation and evidence that the goods covered by ARE -1, there in fact been exported.

The appeal is allowed by setting aside the order of lower authorities with consequential relief.

DECISION: The appeal is allowed.

COMMENT:This is yet another case that depicts that demand was being raised without proper analysis and corroborative evidence that the goods were not exported. The authorities should ensure due diligence while raising demand.

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PJ/Case Laws/2012-13/1314

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