Customs, Excise and Gold Tribunal - Mumbai
G.T.C. Industries Ltd. vs Cce on 10 June, 1999
Equivalent citations: 1999(85)ECR374(TRI.-MUMBAI)
ORDER A.C.C. Unni, Member (J)
1. Shri K.K. Gupta, ld. Advocate appearing for the appellants submits that the appellants who were manufacturers of Cigarettes had obtained cut tobacco under Chapter X procedure of the Central Excise Rules, 1944 to enable them to avail the benefit of Notification No. 356/86 dated 24.6.1986. Subsequently, a part of the said tobacco was used by them for making a special brand of tobacco which was exported. The Asstt. Collector of Central Excise who adjudicated the matter held that since prior permission has not been obtained from the proper Officer for such export, the appellants were not eligible for the benefit under the notification and confirmed the duty demand of Rs. 80,235.75 apart from a penalty of Rs. 1000/-. Ld. Counsel submits that in terms of Rule 196A, excisable goods obtained under Rule 192 can be cleared on payment of duty subject to the previous approval of the proper Officer as also cleared for export. The appellants had only made use of a surplus quantity of 3,100 Kgs. of cut tobacco obtained by them under Chapter X procedure and since they had complied with the requirements of Rule 196A, no duty demand was liable to be made against them. In this connection, Ld. Counsel refers to three letters sent by the appellants to the Range Superintendent on 16.3.1991,18.3.1991 and 21.3.1991 (Annexure-A to the Memorandum of Appeal), by which the appellants had informed the Range Superintendent that they are making use of part of the cut tobacco for purposes of export and they were informing the Range Superintendent accordingly.
2. Ld. JDR Shri V.M. Udhoji refers to the Order-in-Appeal wherein the provisions of Rule 196A had been discussed by the Collector (Appeals). The Collector (Appeals) had found that the letters sent by the appellants do not constitute an application or request for obtaining previous approval of the proper Officer in terms of Rule 196A. Further, the fact that their unit was under physical control did not mean that the Officer concerned had the powers of the proper Officer under Rule 196A. The Collector (Appeals) had found that the approval not having been granted by the proper Officer, the export was not in accordance with the provisions of Rule 196A and hence neither the condition of Chapter X procedure nor that of Notification No. 356/86 had been complied with.
3. We have considered the submissions of both sides and have also perused the records. We find no reason to disagree with the conclusions of the Collector (Appeals) in the impugned order. Ld. Counsel had brought to our notice the Tribunal decisions in American Dry Fruits Stores v. CCE and CCE v. T.I. Cycles of India . The Tribunal had in the first case held that goods alleged by the Department to have been manufactured without licence but the entire quantity of which had been exported was held to be a case where duty demand was not justified. In the case of T.I. Cycles of India (supra) goods which were not exported directly from the factory as required under Rule 173PP(13) lack of compliance thereof was held to be condonable. We find that the facts of these two cases are very different from the facts in the case before us. In the facts of the present case, the appellants had obtained cut tobacco at concessional rate under Notification No. 355/86. One of the conditions of the said notification was that the removal would be in accordance with Chapter X of the Rules. Further, the said goods should be utilised for the purposes for which the concession had been given. Even under Rule 196A, for purposes of diverting surplus of the goods for the purpose of export, the said rule provides for the condition of prior approval of the proper Officer. The three letters which had been relied upon by the appellants as evidence of complying with the requirement of Rule 196A do not, in our view, satisfy the condition of Rule 196A inasmuch as the letters themselves do not seek any previous permission of the proper Officer as such. The wording used in the said letters only show the intention of the appellants to divert part of the cut tobacco for manufacture of items meant for export. The letters only coveyed their said intention to the Supetintendent of C.E. Mere conveying of such intention is not proper compliance of the requirement of Rule 196A, as has been rightly held by the Collector (Appeals). We also do not accept the argument of the appellants' Counsel that the lapse, if any, on appellants' part was only procedural and not substantive. We hold that the requirement of obtaining previous approval of proper Officer under Rule 196A (which is very much part of Chapter X) is not a mere technical formality non-compliance of which can be treated as a mere procedural lapse.
4. In the above view of the matter, we find no reason to interfere with the findings in the impugned order. The same is confirmed.
5. This appeal is, as a result, dismissed.
(Pronounced in the court).