| SooperKanoon Citation | sooperkanoon.com/32320 |
| Court | Customs Excise and Service Tax Appellate Tribunal CESTAT Calcutta |
| Decided On | Sep-18-2003 |
| Judge | A Wadhwa, R K Jeet |
| Reported in | (2003)(158)ELT72Tri(Kol.)kata |
| Appellant | Indian Oil Corporation |
| Respondent | Commissioner of C. Ex. |
2. Proceedings were initiated against the appellants by issue of show cause notice No. 87/SRN/Export/94 dated 27-4-1994 on an allegation that they have contravened the provisions of Rules 13, 52A, 173O and 185 of the C.E. Rules, ibid on the ground that they have exported 18,079.309 KL of SRN at 15 C without furnishing intimation to the Department in proper form and the consignment in question was delivered without supervision by any Central Excise Officer and the assessee-appellants have thus undertaken the export without observing any procedure laid down in the relevant Rules. After due process of law, the adjudicating authority passed the order impugned confirming the duty and imposed penalty as noted above.
3. We have heard Shri C.A. Sudarshan, DG, Finance on behalf of he appellants and Shri T.K. Kar, learned SDR for the Revenue.
4. We have gone through the case records. The brief facts of the case are that M/s. Indian Oil Corporation Ltd. Refineries Division, Haldia was engaged in the manufacture of petroleum Products from the imported Crude Oil. Straight Run Naptha (SRN for short) is an intermediate product produced in the course of manufacture/distillation process. The case of the appellants was that there was a short fall in domestic demand for SRN and in order to keep the refinery running in the national interest, it was necessary to export Naptha on an emergency in order to create storing space for the goods. Accordingly, they sought permission from the Department vide their letter dated 13-1-1994 for provisional export of the goods from Haldia Port. Based on the request made by the appellants, the concerned Range Supdt. of Central Excise, Haldia vide his letter dated 13-1-94 sought for the advice of the Commissioner of Central Excise in the matter. The party vide another letter No. HLF/FIN/97 dated 13-1-94 had informed the Department that the they have arranged export of SRN by transshipment to export Vessel at Madras and that the Country of export and the export Vessel's name was not yet known and they have also prepared provisional AR-4A for the purpose of loading 13,000 MT of SRN. They have also indicated in the said letter that proof of export will be provided within the stipulated time from the date of actual loading for redemption of export bond.
However, goods weighing a total quantity of 36,053.632 K.L. were loaded to export Vessel by transhipment as per Bill of Lading No. 3/94 on 31-1-1994, without following the provisions of Rule 13, 173O and 185 of the Rules ibid. Rule 13 clearly stipulates that export is to be made in accordance with the procedure set out in the provisions as contained in Chapter IX i.e. the export can be effected after the export is approved by the Commissioner and the export has to be undertaken in the presence and supervision of the Customs. In the instant case, the exporter had requested for permission to effect export of the goods on provisional basis vide his letter dated 13-1-94 and on the same day itself by another letter, copy filed on page 25 of the paper book, they themselves had informed the Department that they have arranged for export of SRN by transshipment to export Vesssel at Madras and they have finally exported the goods on 31-1-94, without following any procedure laid down under the Rules. They have taken a plea that since they have not received any response to their letter dated 13-1-94 they had to effect the export of the goods. We note that their letter seeking to export the goods on provisional basis is dated 13-1-94.
Examining this plea, we observe that the records clearly show that a decision to export the goods without the permission of the Customs has already been taken by the exporter inasmuch as a part of the export, they have already loaded a quantity of 7005.452 KL of the goods at MRL Madras on 10-1-94 i.e. even before they made a formal request for permission to export the goods. Only after loading a quantity of 7005.452 KL of the goods by vessel MV Jagpriya at MRS Madras, the vessel sailed to Haldia port where the vessel was loaded with another quantity of 18079.309 KL on 16-1-94 and again the vessel sailed to Madras Port where another quantity of 14583.449 KL was loaded and then the vessel sailed to Visakhapatnam Port where the goods were transshipped to Export Vessel Athenian Victory on 31-1-94. The plea of the appellants is that they had to resort to export the goods in an emergent situation as there was no storing facility. They themselves have admitted in the narration of facts that similar situation had arisen in 1987 and in order to export the goods, AR-3A application was made which was duly endorsed by the Customs Preventive Officer.
Therefore, the plea that the present situation of surplus SRN has arisen in an emergent situation, cannot be countenanced as they themselves had faced with such situation earlier. It is not the case of the appellants that they were not aware of the export formalities. It also cannot be the case of the appellants that the whole quantity of 36,053.632 KL of SRN was produced all of a sudden. It was well within their knowledge that there was lack of storing facility and the goods had to be removed by export for want of domestic demand. Further plea that because there was no response from the Department to their request seeking permission to export the goods on provisional basis, they had to resort to the expert without going through Central Excise rules, has also no basis inasmuch firstly they have already started the process of export by shipment of the goods as early as on 10-1-94 when they shipped 7005.452 KL of SRN at MRL, Madras whereas their letter requesting for permission to export is dated 13-1-94. Secondly by their another letter dated 13-1-94 they themselves have admitted that they have arranged for the vessel for export of the goods and the name of the vessel is not known. Even after writing the letter dated 13-1-94, the so called period for which the exporter had waited for the response from the Department was two weeks and not a very long period.
Therefore, in the above background of the case, their plea that AR-4A (i.e. application for removal of excisable goods) could not be made prior to export is without any basis, and they could have very well sought approval well in time. The fact is that the exporter has allegedly made the export and cleared the excisable goods without payment of duty and without following the Central Excise procedure.
Further there is no rule providing for 'provisional AR-4A'. We further note that the copy of the AR-4A form filed in the paper book at page 9 does not bear any particulars whatsoever. What is visible is only the various columns of the printed form and not the particulars. The appellants have relied upon the decision of the Tribunal in the case of CCE v. T.I. Cycles of India Ltd. reported in 1993 (66) E.L.T. 497 wherein it was held that goods when meant for export and have actually been exported, in the interest of the export promotion of exports, lack of compliance with Rule 173PP(13) to 18 and 185 condonable under Rule 12 ibid. We find from the said order that it was a case of claim of rebate for the export already made on payment of duty and the party had made out AR-4A and submitted the same to the Customs Officer before the Export of the goods and the Customs Officer at Bombay had certified the shipment of the cycles under the relative AR-4A. In the present case, the AR-4A was not submitted and the appellants had sought for provisional AR-4 and they have removed the excisable goods without payment of duty. Therefore, it appears that the case law does not come to the rescue of the appellants. In view of the above, prima facie it cannot be said the appellants have made out a case for total waiver of the amount involved in this appeal. At best it can be said that the appellants have made out an arguable case. Be that as it may, we also take into consideration the fact that the exporter-appellants are a Public Sector Unit and have earned valuable foreign exchange for the country. Keeping all these factors into consideration, we are inclined to think that interests of justice would be served if the appellants are put to terms. We, therefore, direct the appellants to make a pre-deposit of Rs. 1,00,00,000/- (Rupees One crore) out of the total duty demand of Rs. 4,48,54,764.63 and a penalty of Rs. 40,00,000.00, subject to which pre-deposit of the balance of duty and the entire penalty shall stand waived and the recovery of the same stayed during the pendency of the appeal. The deposit shall be made within a period of three months from the date of receipt of this order. We make it clear that if the pre-deposit is not made within the stipulated date, then the appeal shall be liable for rejection in terms of Section 35F of the C.E. Act, 1944. It is open to both the sides to take out application for early hearing of the appeal in view of the huge amount involved.