Full Judgment
2. On receipt of the said goods, consignee i.e. M/s Universal Impex, vide letter dated 5.5.03, bearing intimation No. 10/03-04 informed his jurisdictional Central Excise Superintendent about the receipt of the goods and also annexed invoice and relevant AR-3. It was also disclosed in the said letter that the relevant entry in their in-bond register, in respect of the said goods has been made by them vide Sr.No.11/03-04. The said letter was acknowledged by the consignee's range supdtt. and thereafter, a copy of the said letter along with duplicate copy of ARE 3 was sent by the consignee to the appellant.
3. However, proceedings were initiated against the appellant alleging that re-warehoused certificate, duly signed by the consignee's range supdtt. has not been received by the appellant's range supdtt., within a period of 90 days; They are liable to pay duty in respect of the said goods in terms of provisions of Rule 20 of Central Excise Rules. The said proceedings culminated into an order passed by the original adjudicating authority and confirmed by appellate authority confirming demand of duty and interest, along with imposition of personal penalty of identical amount.
4. I have heard Shri Willingdon Christian, Ld. Advocate appearing for the appellant and Shri Samir Chitkara, Ld. SDR for the Revenue.
5. Rule 20 of Central Excise Rules, 2002 allows removal of goods from factory of production to a warehouse without payment of duty, subject to such conditions and safeguards and procedure, as may be specified by the Board. In terms of provisions of Sub-rule (3) of the said rule, the responsibility for payment of duty on the goods shall be upon the consignee. However, Sub-rule (4) is to the effect that if the goods dispatched for warehousing or re-warehousing are not received in the warehouse, the responsibility for payment of duty shall be upon the consignor (emphasis provided). As such, it is seen that the duty can be demanded from the consignor of the goods, only when the goods cleared are not received by the consignee.
The safeguards and the procedure, in terms of the provisions of Rule 20(2) stands prescribed by Board vide its circular No. 579/16/2001-CX dated 26.06.2001. Para (2) of the said circular details the procedure required to be followed by the consignor. There is no dispute that the same stands followed by the appellate. The duplicate copy of the ARE3 along with a copy of the intimation letter by the consignee to his jurisdictional supdtt. accepting receipt of the goods and their entry in the in-bond register stand received by the appellant. As such, the provisions of Sub-rule 4 of Rule 20, which prescribe for payment of duty from the consignor in case of non-receipt of goods at the consignee's end will not apply. The Revenue's objection that duplicate copy of ARE-3 duly enclosed by the consignee has not been received by the appellant is un-sustainable in as much as the entire idea of endorsement of ARE-3 by the consignee is to ensure the receipt of the goods by the consignee. Whether the acknowledgement is by way of endorsement on ARE-3 or by way of enclosing a separate intimation to supdtt., the same would satisfy the condition of the said rule, as the essence of the same is to prove receipt of the goods.
6. As regards the second objection raised by the Revenue regarding non-receipt of warehousing certificate by the appellant's jurisdictional supdtt. from the consignee's range supdtt., I would like to reproduce the relevant procedure as contained in Para (3)(b) of Board's circular issued under Rule 20(2).
3(b) If the Superintendent-in-charge of the consignor of the excisable goods does not receive the original warehousing certificate, duly endorsed by the consignee and countersigned by the Superintendent-in-charge of the consignee, within ninety days of the removal of the goods, weekly reminders must be issued by him to Superintendent-in-charge of the consignee. If despite such reminders the original warehousing certificate is not received within a further period of sixty days of the expiry of the ninety days period, the Superintendent-in-charge of the consignor shall inform his Assistant Commissioner/Deputy Commissioner who shall either secure a satisfactory proof of the goods having been duly received by the consignee or ensure that the duty of excise due on the goods not received at destination is recovered from the consignor As is clear from above, the warehousing certificate is to be procured by one supdtt. from other and as such, is an inter-departmental correspondence. The consignee having informed his jurisdictional supdtt. about the receipt of the goods, is not expected to do anything more. It was for the supdtt. of the consignee to visit the consignee's ware house, verify the goods and issue the certificate and send the same to cosigner's supdtt. Having failed to perform his duties, the burden of duty can not be fastened upon the consignor. It is further seen that even the appellant's supdtt. did not make any efforts to procure the certificate by entering into correspondence with consignee's supdtt., as envisaged in the Board's circular, relevant paragraph extracted above. It is further seen that if such certificate is not issued even inspite of reminders, matter has to be brought to the notice of senior officers who shall secure a satisfactory proof of the goods having been received at the consignee's end. No such efforts to find out the actual state of affair as regards the receipt of the goods by the consignee has been made by the officers. On the contrary, appellant has been burdened with duty and penalty for the failure of the officers to follow the procedure and do the needful.
In any case, I find that the essence of the procedure in the said circular is to be satisfied about the reaching of the goods at destination, as is clear from the fact that in case of non-receipt of warehousing certificate, matter is to be reported to Astt. Commissioner or Dy. Commissioner who will secure proof of the goods having reached the consignee's end. If such receipt is not otherwise doubted and goods are proved to have reached the warehouse, benefit cannot be denied. In the present case, the benefit has been denied on the sole ground of non-production of certificate. There is otherwise no doubt about the fact of non-receipt of goods at the consignee's end, which indeed, cannot be there in view of the consignee's acceptance in the form of intimation" letter to his supdtt. In such a scenario, demand of duty from the appellant in terms of Rule 20(4) is neither warranted, nor justified in as much as the same can be demanded from the consignor only in case of non-receipt of goods by the consignee.
7. In view of foregoing, I set aside the impugned order and allow the appeal with consequential relief to the appellant.