Custom, Excise & Service Tax Tribunal
M/S. Superfil Products Ltd vs Cce, Puducherry on 8 June, 2017
IN THE CUSTOMS, EXCISE & SERVICE TAX
APPELLATE TRIBUNAL
SOUTH ZONAL BENCH, CHENNAI
E/197, 198 and 291/2008
(Arising out of Orders-in-Appeal No.8 & 9/2008 (P) dated 3011.2008 and Order-in-Appeal No. 36/2008 (P) dated 30.4.2008 passed by the Commissioner of Central Excise (Appeals), Chennai)
M/s. Superfil Products Ltd. Appellant
Vs.
CCE, Puducherry Respondent
Appearance Shri N. Viswanathan, Advocate for the Appellant Shri S. Nagalingam, AC (AR) for the Respondent CORAM Honble Ms. Sulekha Beevi C.S., Member (Judicial) Honble Shri Madhu Mohan Damodhar, Member (Technical) Date of Hearing / Decision: 08.06.2017 Final Order Nos. 40899-40901 / 2017 Per Madhu Mohan Damodhar All these appeals being on same issue, they are taken up together for common disposal. Appeal No. E/197 & 198/2008 emanate from the same Orders-in-Appeal No. 8 & 9/2008 dated 30.1.2008 for the periods September 2003 to 17.7.2004 and 16.12.2004 to 27.10.2005 respectively. Appeal No. E/291/2008 pertains to Order-in-Appeal No. 36/2008 dated 30.4.2008 involving period from 11.1.2005 to 25.2.2006.
2. The common issue in these appeals is that appellant made clearances of Nylon Multifilament Yarn of 210 deniers and 420 deniers to advance license holders/ EOU. No CENVAT credit had been availed on the inputs. No duty was discharged on the impugned clearances on the ground that they were being cleared as deemed export. Department has taken a view that the said clearances have been done without following the provisions of Central Excise (Removal of Goods at Concessional Rate of Duty for Manufacture of Excisable Goods) Rules, 2001. In particular, the requirement of clearances of goods after receipt of countersigned application obtained by the advance license holders from their jurisdictional Central Excise authorities. Differential duty liabilities have been demanded by the original authority in each case, along with interest liabilities thereon and penalties imposed under various provisions of the Central Excise Act. The lower appellate authority rejected the appeals filed by the appellants. Accordingly, the appellants are before this forum.
3. Today, when the matter came up for hearing, ld. Advocate Shri N. Viswanathan submits as under:-
3.1 There is no dispute that the goods cleared to the intended recipients, namely the advance license holders / EOU, have in fact been received by them. This is evidenced by the fact that ARE3s, accompanying the cleared goods which have been endorsed confirming the receipt of the material of the consignment at the consignees end. Such endorsement has being made by the jurisdictional Inspector and Superintendent of Central Excise at the recipients end.
3.2 There is no dispute that the recipient manufacturers have in-turn exported the goods manufactured out of such yarn which is evidenced by the redemption letters issued to them by DGFT.
3.3 In the circumstances, the requirement of clearing of the goods only after receipt of Form I with the endorsement of the jurisdictional Central Excise authorities at the recipients end is, therefore, not a substantive requirement for the purpose of claiming exemption in these cases.
3.4 Reliance is also placed on the following case laws:-
(a) Judgment of the Honble Supreme Court in the case of Sambaji Vs. Gangabai 2009 (240) ELT 161 (SC). The Honble Apex Court has held that procedural law is not to be a tyrant but a servant, not an obstruction but an aid of justice.
(b) The decision of the Tribunal in Indian Aluminium Co. Vs. Commissioner of Central Excise 1995 (79) ELT 111 (Tri.), wherein in a similar issue, non-execution was held as a procedural lapse and for such lapse the benefit of exemption could not be denied.
(c) The decision of the Tribunal in National Mechanicals Vs. Commissioner of Central Excise, Kolkata 1983 (14) ELT 2370 (CEGAT), where non-execution was held to be merely non-technical compliance. It is noted that the appeal filed by the department before the Honble Supreme Court against this decision was allowed to be withdrawn as reported in 1990 (45) ELT A32 (SC).
4. On the other hand, learned AR Shri S. Nagalingam supports the impugned order. He further submits that the said Form I is an important requirement without which the appellant cannot clear the goods to the recipients on nil payment of duty. This procedural requirement is a necessity and cannot be done away with.
5. We have heard both sides and gone through the records.
6. From the facts we find that there is no doubt that the goods have reached the intended recipients and have been utilized for intended purposes. It is also not in dispute that though the goods have been cleared without the Form I a requirement in clause 4 of the Notification, nonetheless, they have been cleared on ARE3s. Further, the receipt of the goods consigned has been endorsed by the jurisdictional Central Excise authorities on the reverse of such ARE3s at consignees end. In our opinion, the said condition of Form I in clause 4 of the notification cannot then be considered as a substantive law especially when all other requirements and other conditionalities have been satisfied. We also find that the case laws cited by ld. Advocate are fully applicable to the facts of the case. In the circumstances, we find that the demands raised against the appellant and upheld in the impugned orders cannot be sustained and will therefore have to be set aside, which we hereby do.
7. In the result, all the three appeals are allowed with consequential benefit if any, as per law.
(Dictated and pronounced in open court)
(MADHU MOHAN DAMODHAR) (SULEKHA BEEVI C.S.)
Member (Technical) Member (Judicial)
Rex
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E/197, 198 and 291/2008