The Ahmedabad Bench of Customs, Excise and Service Tax Appellate Tribunal (CESTAT) has quashed the penalty on small time printer in alleged export scheme violation.
The bench of R.Muralidhar (Judicial Member) and Satendra Vikram Singh (Technical Member) has observed that the appellant is only a small time printer working under SSI. He has been given orders by M/s. Print Zone to print “Exercise Note Books” and was directed to supply the same to M/s. Rup Exports for delivery at their place. As a small time vendor, he is not expected to know as to under which scheme the export was undertaken by M/s. Print Zone/Rup Exports. His genuinity gets clarified by the fact that they have cleared the goods on payment of Excise Duty and they are also showing the details of such clearance in their monthly ER-1 Returns.
The appellant is the manufacturer of “Exercise Note Books” and they have supplied the same to M/s. Print Zone on payment of appropriate central Excise Duty. Finding that M/s. Print Zone has imported capital goods using EPCG licence and they were using the goods procured from the appellant and showing that they are discharging the Export Obligation, proceedings were initiated against M/s. Print Zone as well as on the present appellant M/s SNEHRAJ NOTEBOOK INDUSTRIES as a co-noticee.
The allegation of the department is that present appellant was not declared as supporting manufacturer in the EPCG licence. The goods supplied by them to Ms/. Print Zone was being misused by them towards fulfilment of Export Obligation.
Therefore, the department alleged that the appellant has abetted in contravention of the provisions of Section 113 (i) of the Customs Act, 1962. After due process, the adjudicating authority imposed penalty of Rs. 2,00,000/- under Section 114 (iii) and Rs. 1,00,000/- under Section 117 of the Customs Act, 1962 on the appellant.
The appellant contended that they were not aware as to whether M/s. Print Zone has misused EPCG licence or not. They only knew that M/s. Print Zone was getting the goods exported through some third party and accordingly, the goods were being directly dispatched to the third party after discharge of Excise Duty. The order may be set-aside and appeal may be allowed.
The tribunal did not find that the Department has made out a specific case of abetment from their side in the alleged contravention indulged by M/s. Print Zone. Therefore, the order to the extent of penalty imposed on the appellant is set aside and the appeal was allowed.
Case Details
Case Title: Snehraj Notebook Industries Versus Commissioner Of Customs-Ahmedabad
Case No.: Customs Appeal No. 10337 Of 2023
Date: 17.03.2025
Counsel For Appellant: Ashish Jain & John Christian
Counsel For Respondent: Sanjay kumar
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