Appellants are 100% EOU units, manufacturers of Twisted Polyester Yarn cleared two consignments to another EOU against CT-3 certificates. A show cause notice was issued to them for non submission of original AR3A. Appellants have sent original, duplicate and triplicate with the consignments and submitted quadruplicate copy to the Jurisdictional Superintendent. On receipt of the goods consignee has to send the original duly signed to Superintendent of supplier unit. In case of non-receipt of the said AR3A, the Superintendent to ensure the goods have been received by the consignee and to initiate recovery of duty. Responsibility of the consignor of the goods ends once he receives the duplicate copy of the AR3A and informs Range Officer. His statutory obligation is over once he receives the duplicate copy endorsed by the consignee unless it is proved that consignor himself diverted the goods or responsible for diversion.

Hon’ble Tribunal held that rule 20 of warehousing provisions and the board circular, it is clear that the responsibility of duty payment cannot be fastened to consignor merely because the range officer failed to do his duty enjoined upon him by the circular of the board. Therefore appellant cannot be found fault with for non-receipt of original copy of re-warehousing certificate.

Appellants are engaged in the manufacture of mosquito repellants & apparatus falling under Chapter 85 & 38 respectively. Appellants availed credit on two injection moulds and the same was cleared for job work under rule 4(5)a. The said moulds were not returned within 180 days and a show cause notice was came to be issued proposing to recover the credit availed and to impose penalty. Original authority confirmed the demand and imposed equal amount of penalty. In an appeal to Commissioner (Appeals) the said order was upheld on the ground that the moulds are parts of capital goods. Hence an appeal before CESTAT.

3. Supplies to SEZ Developers/ units are "Exports". Demand of 10% of amount, treating such goods as "Exempted goods", not sustainable. Prima facie case made out , pre-deposit waived.

Applicants are the DTA Unit supplied goods to SEZ Developers. Dept. has issued notices for demand of 10% of amount of value of such clearance under rule 6(3)b of CenvatCredit Rules, treating the said goods as exempted goods and having not

maintained the separate account. Hence the appeal before CESTAT.

Hon’ble Tribunal held that the goods supplied to SEZ cannot be treated as "exempted Goods". It is also held that the supply to SEZ is "Export" and hence the rule 6(3)b will not be applicable, relying on the Board Circular No. 29 of 2006 dated 31-12-2006.

Authority: Nu-Chem Ltd vs Commissioner of Central Excise 2010(251) ELT 63(T).

4. Settlement of case application maintainable only if duty liability disclosed is accepted. Appellant cannot be permitted to dissect the settlement Commission order to accept what is favourable to them and reject what is not .

Appellant is an importer and ship repair unit registered with the Director General of Shipping. The investigations revealed that the appellants have clandestinely availed benefit of exemption Notification No. 211/83-Cus dated 23-7-1983 on the import of multiple consignments of Engineering Cargo as ship stores. A show-cause notice was issued totalling Rs. 68.78 lakhs and upon adjudication, the said amount was confirmed with equal amount of penalty. Settlement Commissioner settled the case directing the appellant to pay the entire duty amount and penalty in excess of Rs. 18 lakhs. However the appellants took the matter to High Court and raised the additional grounds that the customs duty was not payable. However the Hon’ble High Court dismissed the petition as a fresh ground cannot be entertained. Appellants challenged the said decision of High Court before the Apex Court.

The Apex Court held that the additional ground which was not before the Settlement Commission cannot be taken before the Apex Court. It was also held that appellant cannot be permitted to dissect the Settlement Commission’s order with a view to accept what is favourable to them and reject what is not.

Authority: Sanghvi Reconditioners Pvt. Ltd. vs Union of India

5. Board circular cannot override exemption Notification issued Section 37B of Central Excise Act 1944.

Appellants, a 100% Export Oriented Unit. Appellants were procuring LDO under CT3 certificates without payment of duty under Notification No. 22/2003-CEdated 31-3-2003. This facility was withdrawn by Circular No.796/29/2004 dated 4.9.2004 and it was clarified that 100% EOU can avail cenvatcredit. Appellants thereafter bought LDO on payment of duty and filed a rebate claim for the duty paid. Same was rejected on the ground that the LDO is excluded from the definition of input.

Hon’ble CESTAT held that the benefit which was extended by the notification cannot be denied by board circular when the notification was in force. Therefore rebate claim is eligible to appellants.