Custom, Excise & Service Tax Tribunal
M/S Packaging India Pvt. Ltd vs Cce, Meerut on 1 February, 2012
CUSTOMS EXCISE & SERVICE TAX APPELLATE TRIBUNAL West Block No.2, R. K. Puram, New Delhi. Date of hearing/decision: 01.02.2012 For approval and signature: Honble Ms. Archana Wadhwa, Member (Judicial) Honble Shri Rakesh Kumar, Member (Technical) 1. Whether Press Reporters may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982. No 2 Whether it should be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not? Yes 3 Whether Their Lordships wish to see the fair copy of the Order? Seen 4 Whether Order is to be circulated to the Departmental authorities? Yes Excise Appeal No. 50 of 2011 with Excise Stay No. 61 of 2011 (Arising out of order in original No. 14/Comm/M-II/2010 dated 29.11.2010 passed by the Commissioner, Customs, Central Excise & Service Tax, Meerut) M/s Packaging India Pvt. Ltd. Appellants Vs. CCE, Meerut Respondent
Appearance:
Rep. by Sh. R.K. Hasija, Advocate for the appellants.
Rep. by Sh. N. Pathak, DR for the respondent.
Coram: Honble Ms. Archana Wadhwa, Member (Judicial) Honble Sh. Rakesh Kumar, Member (Technical) ORDER NO._______ Per: Archana Wadhwa:
Both sides submit that there is no confirmation of demand of duty in the present proceedings, requiring any dispensation with the pre-deposit in terms of Section 35F of the Central Excise Act. The impugned order denies the benefit of Notification No. 50/2003-CE dated 10.06.2003, an area based exemption notification.
2. It is seen that the impugned order was also challenged by the appellant before the Honble High Court of Uttarakhand at Nainital. Vide their order dated 14.12.2010, the petition filed before the Honble High Court was dismissed with direction to the appellant to file an appeal before the Tribunal alongwith stay petition.. It also stands recorded by the Honble High Court that until one month from the date of passing of the order and until the stay application is decided by the appellate authority, the department is restrained from collection of excise duty at the time of removal of the goods from the factory of the appellant.
3. At this stage, learned Advocate submits that subsequent to the passing of present impugned order, proceedings for confirmation of demand of duty were also initiated against them, which stands culminated into an another order passed by the Commissioner confirming the demand. They are in the process of filing an appeal against that order alongwith stay petition.
4. At this stage, we find that the entire purpose of staying the operation of the present impugned order, as directed by the Honble High Court, has got defeated inasmuch as the demand already stands raised and confirmed. As such, at this stage, we find no justifiable reason to stay the operation of the present impugned order.
5. However, we find that a short issue is involved in the present appeal. The appellant are located in the are of Uttarakhand, two area based exemption notification being exemption Notification No. 49/2003-CE dated 10.06.2003 and Notification No. 50/2003-CE dated 10.06.2003 stands issued by the Government of India granting exemption to the units located in the States of Himachal Pradesh and Uttarakhand. The appellant being located in the state of Uttarakhand are admittedly entitled to the benefit of Notification No. 50/2003-CE dated 10.06.2003. The said notifications require an assessee to file declarations before claiming the benefit of said notification. The appellant filed a declaration with their jurisdictional Central Excise authorities for claiming the benefit of the said notification. However, instead of mentioning Notification No. 50/2003-CE, which covered the goods manufactured by them, they inadvertently mentioned Notification No. 49/2003-CE.
6. On the above basis, proceedings were initiated against them proposing denial of the benefit of notifications in questions on the ground that Notification No. 49/2003-CE does not cover the goods manufactured by the appellant. The appellant contended that reference to Notification No. 49/2003-CE, in their declaration, was inadvertent mistake and the same should be read as Notification No. 50/2003-CE.
7. The entire dispute evolves on the above sole question. The Commissioner while holding that the benefit of Notification No. 49/2003-CE is not admissible to the appellant has denied the benefit of Notification No. 50/2003-CE on the sole ground that the declaration does not stand filed under Notification No. 50/2003-CE. For better appreciation, we reproduce para 11 of the Commissioners order:-
11. Now I examine the second aspect of their representation that they fulfill all the conditions of the Notification No. 50/2003-CE dated 10.06.2003 and therefore if not under Notification No. 49/2003-CE dated 10.06.2003. They have submitted that since substantive compliance is there, procedural mistakes should not come in play to deny the benefit of exemption. The party have urged that the declarations filed by them under Notification No. 49/2003-CE dated 10.06.2003 may be treated as filed under Notification No. 50/2003-CE dated 10.06.2003. As mentioned in para 9 above the Notification No. 50/2003-CE dated 10.06.2003 prescribe following condition.
The manufacturer who intends to avail the exemption under this notification shall exercise his option in writing before effecting the first clearance and such option shall be effective from the date of exercise of the option and shall not be withdrawn during the remaining part of the financial year.
It is an admitted fact on record that the party did not seek exemption under Notification No. 50/2003-CE dated 10.06.2003 nor did they file any declaration seeking exemption under Notification No. 50/2003-CE dated 10.06.2003. For this reason alone the party is not eligible for exemption under Notification No. 50/2003-CE dated 10.06.2003 at this stage with retrospective effect since they failed to comply with the condition under Notification No. 50/2003 dated 10.06.2003. I place reliance on Honble CESTAT judgement in the matter of Noida Medicare Centre vs. CC, Delhi reported as 2007 (220) ELT 230 (Tri. Del.) wherein the Honble Tribunal has held that even non compliance with one condition disentitles benefit of exemption and examination of fulfillment of other conditions is not required.
8. As is seen from the above, the only ground for denial of benefit of Notification No. 50/2003-CE dated 10.06.2003 is that the appellant has not filed the requisite declarations and has not exercised his option in writing before effecting the first clearance. We note that admittedly a declaration in terms of Notification No. 49/2003-CE dated 10.06.2003 was filed by the appellant. The purpose of filing a declaration is to put the revenue on notice, as regards the appellants option to avail the benefit of the notification. Otherwise also, both the notifications, being area based notifications are available to the units located in that particular area. The only difference between the two notifications is that whereas Notification No. 49/2003-CE is available to the units located in the entire state but relates to the positive list of goods mentioned therein, Notification No. 50/2003-CE is available to units located in specified areas. The purpose of both the notification is to develop the area by expanding the benefit of exemptions from payment of duty of excise.
9. The contention of the appellant is that Notification No. 49/2003-CE was filed by mistake and notification number should have been mentioned as 50/2003-CE. Learned Advocate for the appellant submits that said mistake was detected by the revenue after a period of around three years. Inasmuch as the said mistake is only a procedural mistake relating to No. of notification the substantial benefit of Notification No. 50/2003-CE should not be denied to them.
10. We agree with the above contentions of learned Advocate. The requirement of filing a declaration is a procedural condition. The benefit of the notification is not based upon the said procedural requirement of filing a declaration. In any case, declaration stands filed by the appellant. The fact that Notification No. 49/2003-CE was mentioned instead of Notification No. 50/2003-CE, cannot be considered to be a mistake fatal to the appellants claim of benefit. It is well settled law that the substantive benefit if otherwise available should not be disallowed on the basis of minor procedural irregularities. In the present case, we find that even such irregularity of non filing of declaration was not there.
11. In view of our foregoing discussions, we deem it fit to set aside the impugned order disallowing the benefit of Notification No. 50/2003-CE and allow the appeal itself.
12. Stay petition as also appeal gets disposed of in the above manner.
(Dictated and pronounced in the open Court) (Archana Wadhwa) Member (Judicial) (Rakesh Kumar) Member (Technical) Pant 5