H.K.THAKUR, J. -
(1.)THESE appeals have been filed by the appellants against OIO No. 01/BVR/Commissioner/2013 dated 08.01.2013 passed by Commissioner of Central Excise and Service Tax, Bhavnagar. Under this OIO dated 08.01.2013 Adjudicating authority has confirmed a demand of Rs. 4,86,65,605/ - against the main appellant M/s. Madhu Silica Pvt. Limited, along with interest, and also imposed equivalent penalty upon the main appellant. An amount of Rs. 1,36,04,312/ - paid by the main appellant during the course of the proceedings has also been appropriated by the Adjudicating authority. A penalty of Rs. 10 Lakh has been imposed upon Shri. Darshak Shah, Director of the main appellant under Rule 26 of the Central Excise Rules, against which Appeal No. E/10426/2013 has been filed.
(2.)Shri P.M. Dave (Advocate), Shri Paritosh Gupta (Advocate) and Shri Kuntal Parikh (Advocate) appeared on behalf of the appellants. Shri P.M. Dave argued that main appellant was permitted by Development Commission, Kandla Special Economic Zone to work as a 100% EOU for the manufacture of Precipitated Silica. That main appellant has manufactured and exported the goods so manufactured to foreign countries and also a small quantity of such goods were allowed to be cleared and sold in Domestic Tariff Area (DTA) in accordance with the Export -Import Policy. That by a Notification No. dated 31.03.2003, issued under Section 5A of the Central Excise Act, 1944 main appellant was clearing goods in DTA by paying duty as prescribed under Serial No. 3 of this notification. That during the period January 2007 to June 2007 appellant was clearing, inter -alia, goods in DTA. That by an amending Notification No. dated 06.07.2007 an explanation was added to Notification No. to the effect that inputs received by a 100% EOU from other DTA units, who avail deemed exports benefit as per paragraph 8.3(a) and (b) of the Foreign Trade Policy (FTP), were to be treated as imported goods. That by virtue of this amendment effective from 06.07.2007 even locally procured raw materials were to be treated as imported goods if suppliers have received deemed export benefits for such supply under Para 8.3(a) and (b) of the FTP. That since the documents on which inputs were received remained the same, main appellant continued to avail the benefit of exemption as per Serial No. 3 of the Notification No. . That appellant continued to file intimations with the department on receipt of each consignment alongwith copies of invoices and AR 3As issued by the suppliers. That none of these documents received by the main appellant indicated that suppliers were availing the benefit of Para 8.3(a) and (b) of FTP for the entire period January 2004 to April 2001. That with effect from 12.04.2011 main appellant was allowed to exit and debonded, from 100% EOU by the office of Development Commission KASEZ, for working as a normal DTA manufacturer. That on 27.09.2011 officers of DGCEI started investigating the case. That none of the Directors of the main appellant ever stated that they were aware that any supplier of inputs was availing the benefit of Para 8.3(a) and (b) of the FTP. That after detailed investigation a show cause notice dated 14.12.2011 was issued demands for differential duty of Rs. 1,33,22,958/ - on the grounds that duty on DTA clearance was required to be paid as per Serial No. 2 of table to Notification No. , as amended. That main appellant paid an amount of Rs. 1,36,04,312/ - during the period 03.10.2011 to 07.11.2011 as their application for debonding was otherwise not being allowed by the concerned authority. That appellants filed reply dated 17.02.2012 to the show cause notice that appellants were not aware of the fact that suppliers were availing the benefit of deemed export Under Para 8.3(a) and (b) of the FTP. That substitution of explanation with effect from 06.07.2007, about creation of a fiction in respect of deemed export, was not within the knowledge of the appellants and even Divisional Central Excise Officers were also not aware of the charges. That, assessments of raw material procurements as well as DTA clearances were finalized by field staff without raising any objection. That till date it is not established by the Revenue that raw material suppliers have actually availed deemed export benefit Under Para 8.3(a) and (b) of FTP. That a personal hearing was also held by Adjudicating authority on 09.04.2012 and after holding of hearing, a corrigendum dated 18.06.2012 was issued by the department raising the demand amount to Rs. 4,86,65,605/ - as against Rs. 1,33,22,958/ - mentioned in the Original Show Cause Notice dated 14.12.2011. That on 23.07.2012 appellant filed further reply to the corrigendum and contested that issuing of corrigendum is not on account of clerical or automatic error but has changed the entire basis of the show cause notice. That Adjudicating Authority has not appreciated the submissions made by the appellant and confirmed the demand and imposed penalties based on the corrigendum issued. Learned Advocate argued that DFIA License could also be allowed under paragraphs 8.4.2, 8.4.3, 8.4.4 (iv) and (v) etc. of the FTP and not only under Para 8.3(a) and (b). That in the documents received from M/s. GHCL Limited (GHCL) only DFIA file number and invoice particular were mentioned which does not give any inclination of Para 8.3(a) and (b) benefit being availed by the suppliers and that documents have remained same before and after the date (06.07.2007) of amendment in Notification No. . It was the case of the Learned Advocate, that when documents were not giving any indication of Para 8.3(a) and (b) of FTP then there can not be any intention to evade payment of duty on the part of the appellants as they had no way to know whether suppliers of raw material has availed Para 8.3 and (b) benefits. It was also argued that accordingly extended period of limitation can not be made applicable. Learned Advocate made the bench go through the B -17 bonds executed by the main appellant and argued that execution of general B -17 bond can not be considered to hold that time limit of Section 11A of the Central Excise Act 1944 is not applicable for DTA clearances. For this argument. He relied upon the following case Laws: -
"(i) Sterlite Optical Technologies Ltd. v. CCE Aurangabad. [ : 2011 (270) ELT 266 (Tri. -Mumbai)].
(ii) CCE Pune -I v. Emcure Pharmaceutical Ltd. [ : 2014 (307) ELT 180 (Tri. -Mumbai)]."
2.1. Shri. P.M. Dave, Advocate further argued that in view of a practice being followed before the amendment appellants were under a bona fide belief that they were correctly availing the benefit of Serial No. 3 of exemption Notification No. . He argued that ratio of case Law Bhilosa Industries Pvt. Limited v. CCE Vapi [ : 2015 (317) ELT 283 (Tri. -Ahmedabad), in Para -10 is squarely applicable to their case and extended period is not invokable, as appellants were filing all the required information/returns with the department.
2.2. That enhancement of duty demand by issuing a corrigendum is not legal because corrigendum issued is not only correction of duty by a typographical or clerical error, but it also changes the rates of duties on the grounds not mentioned in the original show cause notice dated 14.12.2011. For this argument he relied upon the following case Laws: -
"(i) Gupta Radio and Watch Company Jaipur v. CC and CE Jaipur. - [ : 1987 (28) ELT 136 (Tribunal)].
(ii) CC and CE Kanpur v. Somani Iron and Steels Limited - [ : 2005 (184) ELT 201 (Tri. -Delhi)].
(iv) (iii) Mukesh Dye Works v. CCE Mumbai -VI. - [ : 2006 (196) ELT 237 (Tri. -Mumbai)].
(v) Castrol India Limited v. CCE Bangalore. - [2001 (135) ELT 1249 (Tri. - Chennai)].
(vi) Steel Authority Of India v. CC, Visakhapatnam. [2007 (210) ELT 150 (Tri. -Bangalore)].
(vii) Kathe Steel Rolling Mills Pvt. Ltd. v. CCE and Cus, Aurangabad. - [ : 2000 (115) ELT 145 (Tribunal)].
(viii) Kishore Hemani v. CC Mumbai. - [ : 2002 (148) ELT 88 (Tri. -Mumbai)]."
2.3. That on merits as well as time bar appellants have a strong case and that penalties on the appellants are also not attracted as there is no intention to evade duty.
(3.)SHRI . J. Nagori, Additional Commission (AR) appearing on behalf of the Revenue argued that on merits appellants have not agitated the case before he Adjudicating Authority hence the same can not be raised at the appellate Stage. He made the bench go through Para -43 of the order -in -original dated 08.01.2013.
3.1. Regarding issue of corrigendum learned AR argued that corrigendum was issued only on account of changes in rates of duty with respect to Serial No. 2 of table to Notification No. during the demand period and was only arithmetical corrections without changing the basis of the show cause notice. He relied upon the following case laws in support of his arguments: -
"(i) Best and Co. v. CC, New Delhi. -[2009 (239) ELT 294 (Tri. -Delhi)].
(ii) CCE, Cus and S.T. BBSR -I v. Konark Industries. [2011 (270) ELT 671 (Tri. -Kolkata)].
(iii)) Sara Services and Engineer Pvt. Limited v. CCE, Meerut -I. - [ : 2010 (254) ELT 486 (Tri. -Delhi)]."
3.2. On the issue of time barred nature of demand, it was argued by the learned Authorised Representative that extended period is invokable as appellant has accepted the duty liability initially worked out and admitted that supplier M/s. GHCL was availing export benefit under Para 8.3(a) and (b) of Foreign Trade Policy. It was his case that demand is not time barred for which learned AR relied upon the following case laws: -
"(i) Novapan India Limited v. CCE & Cus, Hyderabad [ : 1994 (73) ELT 769 (SC)]
(ii) Saraswati Steel Industries v. CCE, Rajkot [ : 2002 (148) ELT 1250 (Tri. Del.)] (iii) CCE, Chennai v. Peter & Miller Packers [2015 -TIOL -652 -HC -MAD -CX]"
3.3. It was also the case of the learned AR that no time limit is applicable for demanding duty from a 100% EOU who has executed a general B -17 bond. He relied upon the case law of Endress + Hauser Flowtec (I) Pvt. Limited v. CCE Aurangabad [2009 (237) ELT 598 (Tri. Mumbai)] and made the Bench go through Para 39 of this case law.