Customs, Excise and Gold Tribunal - Mumbai
M/S. Steelco Gujarat Limited vs Commissioner Of Central Excise & ... on 10 April, 2001
ORDER
J.H. Joglekar, Member(T)
1. On hearing Shri J.C. Patel, advocate for the applicants and Shri Bodade for the Revenue, it appeared that at this stage itself the appeal could be taken up for disposal. This was done on granting waiver of pre-deposit of penalty of Rs. 3,54,374/-.
2. The assessees manufactured excisable goods and cleared them without payment of duty to M/s. Shree Precoated Steel Ltd. in terms of notification 47/94-NT dated 22.9.1994. This notification permitted duty-free clearance of goods which would be used in the manufacture of further goods for export. The notification prescribed that the movement of the goods should be governed by the provisions of chapter X of the Central Excise Rules, 1944. In terms of these provisions the recipient manufacturer was required to possess a registration certificate in the form of or R2 and the movement of the goods would covered under a C.T.2 certificate. In terms of rule 192 of the rules this concession would cease "on the expiry of the registration certificate". (Emphasis added).
3. These certificates in possession of the recipient assessee were dated 16.2.1998 and 19.3.1998 and were valid upto 15.3.1998 and 30.4.1998 respectively. The present appellants supplied certain goods to the holders of C.T.2 certificate on 19.5.1998 and on 20.5.1998, when the validity of the certificate had expired. Show cause notice was issued seeking recovery of the duty of Rs. 3,84,374/-. The Deputy Commissioner confirmed the duty imposed an equivalent penalty and directed recovery of the interest. The order was upheld by the Commissioner in the following manner:-
"It is observed that the appellants were manufacturing and clearing their finished goods on CT2 Certificate under Chapter X procedure at nil rate of duty as per Notification No. 47/94-CE(NT) dtd. 22.9.94. The appellant were issued CT2 certificates bearing No. SPSL/CR/10/97 dtd. 16.2.98 and SPCL/CR/12/97 dtd. 28.3.98. These certificates expired on 15.3.98 and 30.4.98 respectively. Though the said CT 2 certificates had expired, the appellants had cleared the goods without payment of duty. The Notification No. 47/94-CE(NT) dtd. 28.9.94 stipulates that the excisable goods should be removed without payment of duty after following the procedure laid down under Chapter X procedure. Thus it is clear that the appellants had cleared the excisable goods on invalid CT 2 certificates without payment of duty and without following the procedure laid down under the said notification. The appellants are well versed in Central Excise Law and procedures and therefore their argument that it was a technical error is not acceptable. In the circumstances the impugned order passed by the Adjudicating Authority is found correct and proper."
Hence the present appeal.
4. The parent rule 192 shows that it is the continuity of the registration held by the recipient manufacturer that is the qualification for him to receive the goods. It is not that the receipt is valid as long as they are within the expiry dates prescribed in the C.T.2 certificate. There is no authority for this certificate to have a validity period. Shri Bodade here makes a very pertinent point and that its that the period of the bond filed for obtaining an R2 registration may have expired and that the date of expiry of the certificate would be the date of expiry of the bond. This clarification does not arise from the proceedings. It does not appear that the life of the certificate that is of about six weeks would not be the life of the registration.
5. In the extract above, the Commissioner has clearly made an error in holding that the expiry of the certificate was the cause for the demand of duty.
6. Shri J.C. Patel also submits that the receipt of the goods and their utilization in the manufacture of further products is not in doubt.
7. On finding that the logic on which the proceedings were initiated was not backed by the relevant law, the appeal is allowed with consequential relief.
(Dictated in Court)