Custom, Excise & Service Tax Tribunal
M/S Modern Insecticides Ltd vs Cce, Ludhiana on 4 August, 2016
CUSTOMS, EXCISE AND SERVICE TAX APPELLATE TRIBUNAL
SCO 147-148, SECTOR 17-C, CHANDIGARH 160 017
COURT NO. I
APPEAL NO. E/3606/2012
[Arising out of Order-in-Appeal No. 247-48/CE/Appl/Chd-II/2012 dated 16.08.2012 passed by the Commissioner of Central Excise (Appeals), Chandigarh-II]
Date of Hearing: 23.06.2016
Date of Decision: 04.08.2016
For approval and signature:
Honble Mr. Ashok Jindal, Member (Judicial)
1.
Whether Press Reporter may be allowed to see the Order for publication as per Rule 27 of the CESTAT (Procedure) Rules, 1982?
No
2.
Whether it would be released under Rule 27 of the CESTAT (Procedure) Rules, 1982 for publication in any authoritative report or not?
No
3.
Whether their Lordships wish to see the fair copy of the order?
Seen
4.
Whether order is to be circulated to the Department Authorities?
Yes
M/s Modern Insecticides Ltd. Appellant
Vs.
CCE, Ludhiana Respondent
Appearance Sh. Sudhir Malhotra. for the Appellant Shri H. Singh, A.R -for the Respondent CORAM: Honble Mr. Ashok Jindal, Member (Judicial) FINAL ORDER NO. 61017 /2016 Per : Ashok Jindal The appellant is in appeal against the impugned order demanding duty.
2. The brief facts of the case are that during the course of scrutiny of the records, it was observed that the appellant has got issued CT-1 Certificates, for procurement of excisable goods, without payment of duty, from their suppliers. In their capacity as merchant exporter as per the provisions of Notification No. 42/2001 CE(NT) dated 26.06.2001 (ibid). As per the conditions of the said notification the appellant for these consignments was required to export the goods under same bond in their original packed condition, on the strength of original and duplicate ARE-1s issued by the supplier, within six months from the date of clearance from the factory of manufacturer for export. Thereafter, the appellant was required to submit a statement in Annexure 19 along with the original and duplicate copies of ARE-1 with due certification of export by the Customs Authorities for acceptance of the same by the Bond Accepting Authority. It was revealed that instead of exporting the goods in their original packed condition, the appellant used the same as inputs along with the other materials, Solvents and emulsifier materials etc. in the manufacturer of alide goods. The goods ultimately exported in the later on undertaken instead of bond. The appellant admitted that the goods as received on the strength of CT-1 certificates were not exported in their original packed condition but the same were used as raw materials for the manufacture of different products which were ultimately exported, therefore, it was alleged that the appellant has contravened the provisions of Rules 19 of Central Excise Rules, 2002 read with Notification No. 42/2001 CE (NT) dated 26.06.2001 ibid and also misused the facility of CT-1 certificates. In these set of facts, a show cause notice was issued for recovery of excise duty along with interest and to proposed penal action against the appellant. It was also found that the goods was manufactured which was exported by the appellant under claim of rebate. The rebate was called their fraudulently as the inputs have actually been procured under CT-1 Certificate without suffering Central Excise Duty. The rebate claim was allegedly claimed in contravention of the provisions of Rule 19 of the Rules, read with similar notification and same is also recoverable initially. The adjudicating authority denied the claim of rebate but gave the benefit of Notification No. 42/2001 CE (NT) dated 26.06.2001 holding that the goods procured against the CT-1 but has actual been exported by the appellant, therefore, he dropped the demanding of duty against the appellant. The said order was challenged by the Revenue before the Commissioner (A) who holds that the appellant has contravened the condition of the notification, therefore, the appellant is not entitled for the benefit of Notification No. 42/2001 CE (NT) dated 26.06.2001. Aggrieved from the said order, the appellant is before me.
3. The ld. Counsel for the appellant submits that it is not demanded that the goods procured on the strength of CT-1 certificate has ultimately exported as substantially condition of the notification has been complied with. In that circumstances, the appellant has complied the condition of the notification. To support this contention he relied in the decision of I.O.C Ltd. Vs. Commissioner of Central Excise, Calcutta-II reported in 2004 (178) ELT 834 (Tri. Kolkata).
4. On the other hand, the Ld. AR submits that the appellant has not complied with condition of the said Notification, therefore, he is not entitled for the benefit of the said notification. He relied on the decision on the Eagle Flask Industries Limited reported in 2004 (171) ELT 296 (SC) and Arun International reported in 2015 (317) ELT 465 (Tri. Del.).
5. Heard the parties and considered the submissions.
6. After hearing both the sides, I find that the facts of the case are that it is not in dispute that the goods procured by the appellant under the CT-1 certificates have been exported by the appellant. Only allegation against the appellant is that they have not exported the goods in the condition in which they were procured from the manufacturer supplier. Therefore, they have contravened the condition of the notification not entitled to take benefit of the said notification. The Revenue has relied on the decision of Eagle Flask Industries Limited (Supra) wherein the condition of the notification was that to avail the benefit of notification declaration/ undertaking was required to file under exemption notification. In that circumstances, it was observed that those conditions were not applied with there. Further, in the case of Arun International (Supra) this Tribunal has observed that the non submission of declaration of input-output ratio which was required to supply with the condition of the notification. In that circumstances, it was denied.
7. In the case in hand the only contention is that the goods procured for manufacture supplier are to be exported in the same condition. There is no allegation against the appellant for non filing of undertaking/declaration of the department and the fact of the goods has not been disputed by both the sides. In that circumstances, on the decisions of IOC Ltd (Supra) is applicable to the facts of this case wherein this tribunal observed that the commissioner in his order has also admitted that the documents have been filed and the facts of export have been accepted. The departments grievance is that the superintendent of Central Excise did not attend the export. It was not required. The appellant was governed by self removal procedure and to such cases Rule 173-O was applied. It was the appellants option to export under supervision of either the Excise authorities or the Customs Authorities. The commissioner is competent to relax the procedural provision under Rule 12/13 or the Central Excise rules, 1944. In the instant case, it was incumbent upon the Commissioner to grant relaxation from the procedure from the procedural provisions. This Tribunal has observed that when the show cause notice itself admits that export have been taken place after, there is no procedural irregularities in removal of the goods otherwise the SRN was not cleared, then the refinery operations would have come to stoppage. In this case, it is not disputed the goods procured by the appellant has been exported, therefore, I hold that the appellant has complied with conditions of the said notification and there is no demand of duty is sustainable against the appellant.
Accordingly, the impugned order is set aside. The appeal is allowed with consequential relief, if any.
(Order pronounced on _____________) Ashok Jindal Member (Judicial) rt 1