The Customs, Excise & Service Tax Appellate Tribunal ( CESTAT ), Ahmedabad Bench stated that Goods with Domestic Tariff Area ( DTA ) clearance, used for manufacturing of goods, cannot be denied the Excise Duty Exemptions.
The Adjudicating Authority in its findings stated that the appellant had procured raw materials from indigenous source as well as by way of import and used in the manufacture of goods therefore, the appellant are not eligible concessional rate of duty under Notification No. 13/98-CE. Being aggrieved by the impugned order, the appellant, Geeta Fibres Pvt Limited filed the present appeal.
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When the appellant was called, none appeared however, Counsel for the appellant filed a synopsis dated 29.04.2024 which is taken on record.
Shri Himanshu P Shrimali, Superintendent (AR) appearing for the Revenue reiterates the findings of the impugned order.
On consideration of the submissions made by the AR and perusal of record the court found that the entire genesis of the case is that whether the appellant had manufactured the goods, which were cleared in DTA, out of indigenous or imported raw material.
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The appellant has vehemently argued right from the beginning that the goods in question are manufactured out of indigenous raw materials. This Tribunal in the first round of litigation remanded the matter to the Adjudicating Authority reported at Prime Poly Weave Limited vs. CCE, Surat-I – 2005 (189) ELT 208 (Tri. Mumbai) and Final Order No. A/1115 to 1118/WZB/A’bad/07 dated 08.05.2007.
Based on the order released, the Tribunal observed that the source of raw material from which the waste arose is not established and the matter was also remanded for verification on this aspect. The Adjudicating Authority while passing the denovo order with reference to the source of raw material i.e. whether it is indigenous or imported.
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From the available records, it is found that the Adjudicating Authority has stated that the noticee have procured raw materials from indigenous source as well as by way of import for use in the manufacture of subject goods.
The CESTAT Bench comprising Ramesh Nair, Judicial Member and CL Mahar, Technical Member observed that since there was no evidence to prove the manufacturing was done out of imported goods, the matter was remanded with specific directions to the Adjudicating Authority to establish the same. In the denovo adjudication, due to lack of evidence it came to the conclusion, i.e the goods were manufactured out of indigenous as well as imported raw materials.
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The Bench also went through the SCN based on the allegations of manufacture of subject goods out of indigenous and imported raw material and finds that as bald and the same is not based on any evidence. Therefore, despite remand the matter to establish this fact, the Adjudicating Authority has decided the source of raw material only on the assumptions. Therefore, in these peculiar facts, the benefit of doubt clearly goes in favor of the appellant.
So accordingly, in the absence of evidence to prove that the raw materials were used in the subject goods, the appellant cannot be denied exemption in respect of DTA clearances. In view of all, the court set-aside the impugned order and allowed the appeal.
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