Relief for Godrej and Boyce: CESTAT Rules Mere Non-Submission of Re-Warehousing Certificates Not Sufficient to Sustain Duty Demand [Read Order]

The Mumbai Bench of the Customs, Excise, and Service Tax Appellate Tribunal (CESTAT) held that mere non-submission of re-warehousing certificates cannot be the sole basis for confirming central excise duty demand on clearances made to EOUs and SEZs, granting relief to Godrej and Boyce Manufacturing Co. Ltd.

The appeal arose from an order of the Commissioner (Appeals) which upheld the demand of duty on the ground that the appellant failed to furnish re-warehousing certificates for clearances made between October 2003 and November 2008 under exemption Notification Nos. 22/2003-CE and 53/2003-Cus (NT).

Godrej and Boyce Manufacturing Co. Ltd. had cleared goods under bond to multiple EOUs and SEZ units during the relevant period. A central excise duty demand was raised on the premise that re-warehousing certificates were not submitted to establish the receipt of goods at the consignee’s end.

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The matter was previously remanded by CESTAT in 2019, with specific directions to the adjudicating authority to verify the receipt of goods from the records of the consignee units or their jurisdictional officers and to examine any collateral evidence provided by the appellant.

Following remand, the adjudicating authority again confirmed the duty demand, noting that despite efforts to obtain verification from various Customs and Central Excise Commissionerates across India, no confirmations were received due to administrative reorganizations and lack of records. The department also alleged that the appellant did not cooperate in the re-adjudication by declining to furnish fresh documents to support receipt of goods. The Commissioner (Appeals) upheld this order.

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On appeal before the CESTAT, the appellant’s counsel argued that it had already submitted relevant documents during the earlier round of proceedings and that the responsibility for verification of re-warehousing lay with the department, especially given the remand directions and claimed that non-submission of a single type of document, namely the re-warehousing certificate, should not by itself be treated as proof that the goods were not received at the EOUs or SEZs.

The single-member bench of Dr. Suvendu Kumar Pati (Judicial Member) examined the remand directions and the department’s obligations under Circular No. 579/16/2001-CX. The tribunal observed that despite efforts by the department, the required verification could not be completed due to administrative challenges, and there was no evidence on record to confirm or deny receipt of goods.

The tribunal also took note of the appellant’s limited cooperation but concluded that in the absence of evidence from the consignee’s jurisdiction and failure to follow the verification protocol under the CBEC circular, the demand could not be sustained solely on the ground of missing re-warehousing certificates. The tribunal set aside the Commissioner (Appeals)’s order and allowed the appeal, granting consequential relief to Godrej and Boyce Manufacturing Co. Ltd.

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M/s Godrej And Boyce Mfg vs Commissioner of CGST , 2025 TAXSCAN (CESTAT) 519 , Excise Appeal No. 85596 of 2022 , 15 May 2025 , Shri K.A. Photographar , Shri Dinesh Nanal,