1. The Revenue is aggrieved with the OIA Nos. 43 to 45/2004-C.E. and 41 & 42/2004 dated 28-4-2004 setting aside the OIO confirming demands and imposing penalty. The assessees were a 100% EOU and were holders of Customs Private Bonded Warehouse Licence Nos. 230 & 246/2000 valid up to 31-7-2005 and 31-8-2005 respectively. They had cleared the goods "Printed Polyester Fabrics" falling under CH No. 5406.29 of the Schedule to the CE Tariff of 1985 and manufactured out of wholly indigenous raw materials on 20-9-2000 & 28-9-2000 and 13-10-2000, 30-10-2000 & 11-12-2000 Act and cleared under cover of A.R. 4s under bond without payment for export under the provisions of erstwhile Rule 13 of CE Rules. They were required to have exported the goods within six months from the date of clearance and produce the proof of export.
As the proof of export had not been produced within the stipulated period of six months, therefore, proceedings were initiated to recover the duty amount. The assessees contended that the importer viz. M/s.
Ranka Trading Co., Dubai had rejected the goods on the ground that the goods were not up to the standards and that they were not matching the samples sent and the goods were rejected at the assessees' godown before shipment. Photocopy of cancellation of Export order dated 20-12-2000 was submitted by the assessee. The goods, after receipt, were entered in the Rejection Register and a copy of the same was also produced before the authorities. They had removed 18,20,000 Mtrs.
valued at Rs. 2,73,00,000 and 3,25,000 Mtrs. valued at Rs. 48,75,000/- to another EOU viz. M/s. Ahmed Garments, Patancheru without payment of duty under CT3 No. 4 dated 21-9-2001. A copy of the CT3 was also produced. The goods were duly warehoused at the destination and the Range Superintendent had countersigned all the AR3A's. There was a shortage of 1,588.75 Mtrs. and 852 Mtrs. due to actual measurement at the time of removal to another EOU. The value was shown at the price (meant for export) and whereas the assessees sold the rejected goods to another EOU at lesser value, as there was variation in prices. The assessees relied on a large number of judgments to support their case that duty was not required to have been confirmed. They are as follows :Kuntal Granites (P) Ltd. and Anr. v. CCE, Belgaum as reported in 2001 (43) RLT 829 held that "Jurisdiction - 100% EOU - Commissioner to adjudicate Show Cause Notice in respect of removal of goods without payment of duty by 100% EOU only after referring the matter to Board of Approval/development Commissioner or after considering the CBEC's order in this regard."Escorts JCB Ltd. v. CCE, New Delhi equivalent to duty amount - Limit fixed under Section 11AC of Central Excise Act, 1944 is the maximum limit and it is not mandatory that in all cases such maximum should be imposed as penalty - Authority is having a discretion to impose lesser penalty."Aurobindo Pharma Ltd. v. CCE, Hyderabad as reported in 2002 (52) RLT 943 held that "Penalty - Rule 173Q of Central Excise Rules, 1944 not leviable in absence of mens rea and intention to evade payment of duty - appeal allowed.
Therefore, they contended that duty and penalty was not required to have been demanded as the rejected goods were diverted to another 100% EOU and the department was having all the AR3's with them. The Commissioner (Appeals), after due verification of all the records, accepted their plea and set aside the demands confirming the duty on the ground that they had not exported the goods. However, with regard to the shortage of 1588.75 Mtrs. and 852 Mtrs., the explanation given by the assessees was not accepted and the duty on the said goods was upheld and the penalty to the extent of the duty was also confirmed by the Commissioner (Appeals). The Revenue is aggrieved with this order.
2. We have heard the learned SDR. The assessees are not present despite several notices.
3. On a careful consideration and perusal of the entire records and the Grounds of Appeal, it is clear that the Revenue has not made out a case in their favour. There is no dispute regarding the fact that the assessees had exported all the goods to another 100% EOU and all the relevant documents of export had been produced by the assessees and duly verified by the Commissioner (Appeals). The only ground taken by the Revenue is that the Commissioner (Appeals) ought not to have accepted the proof of export. We are not in a position to appreciate this ground. The Commissioner (Appeals), as an Appellate Authority, is vested with all the powers to accept the documents which were also within the department's control. The department is not denying the fact of export of the goods to another EOU. In such a circumstance, the question of confirming demands does not arise. The plea taken by the Revenue that the evidence should have been produced before the original authority is not a correct ground as the Commissioner (Appeals) has the power to accept evidence and scrutinize the case in terms of law. The Commissioner (Appeals) has done a right thing in examining the entire evidence which were not a fresh evidence, but an evidence which was also scrutinized and processed by the department. There is no merit in these appeals and the same are rejected.
(Operative portion of this Order was pronounced in open Court on conclusion of hearing)