Claim of Excise Duty Exemption; No demand Valid on Turnover of Direct Exports and Export Through Merchant: CESTAT directs Denova Adjudication [Read Order]

The Kolkata bench of the Customs, Excise & Service Tax Appellate Tribunal(CESTAT) directed the denova adjudication on the Claim of Excise Duty Exemption, as the demand is not Valid as on Turnover of Direct Exports and Export Through Merchant

The Appellant, M/s Dragon Star Leather Co (P) Ltdwas manufacturing leather goods and exporting the same directly and through 3rd party merchant exporters. They were supplying the same in the domestic market. Show Cause Notice was issued on 22/3/2000. After due process, the Adjudicating Authority confirmed the demand.

The Appellant have filed their Appeal before the Tribunal. This Tribunal remanded the matter to the Adjudicating Authority. Being aggrieved by the Denovo Adjudication, the Appellant filed their Appeal before the Tribunal. This Tribunal dismissed the Appeal. The High Court of Kolkata directed the Tribunal to hear the matter on merits. This Tribunal remanded the matter to the Adjudicating Authority.

The Adjudicating Authority has taken up the denovo proceedings and has passed the impugned OIO No. 08 dated 16/12/2008 wherein he has confirmed the entire demand originally made under the Show Cause Notice.

The appellant submitted that after receiving the Final Order, the Adjudicating Authority sought various documents to complete the adjudication proceedings. The appellant submitted detailed documentary evidence that would prove that the turnovers are on account of direct exports, exports through merchant exporters and local sales of manufactured goods and traded goods.

Further submitted that for the period 1995-96 1996-97, 1997-98, and 1998-99, they also sought small-scale exemption for the turnover as was applicable during that time. He submits that even this request was not properly considered by the Adjudicating Authority. He further submits that they have filed year-wise, invoice-wise, and item-wise, details of direct exports through merchant exporters.

A two-member bench of Mr R Muralidhar, Member (Judicial) And Mr K Anpazhakan, Member (Technical) observed that the matter pertains to 1996-97 and 1997-98 and denovo adjudication was to be taken up in 2008, much better and larger efforts should have been made by the Adjudicating Authority to follow the principles of natural justice and to get proper verification done, which has not been done in this case. Now the Appeal filed by the Appellant in 2010 has come up for hearing after more than 12 years.

“In such a case, we have no alternative but to remand the matter to the Adjudicating Authority with the following directions:- (i) The Appellant has already filed their detailed documentary evidence as outlined above. The Adjudicating Authority should conduct the necessary verification and pass a detailed Order after going through the Invoice, Shipping Bill and other linked documents. Further, their claim about SSI exemption should also be considered properly and order is required to be passed on this account also.”, the Tribunal held.

Since the matter pertains to 1995-1996 to 1998-99, the CESTAT directed the Adjudicating Authority to complete the Denovo process within four months from the date of receipt of the Order. 

To Read the full text of the Order CLICK HERE

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