Belated re-warehousing certificate cannot by itself sustain duty demand where Chapter X procedure and refund entitlement apply.

Duty demand for clearance to a 100% export-oriented unit under Chapter X procedure was held unsustainable where the only lapse was delayed production of the re-warehousing certificate. The tribunal noted that the goods had moved on CT3 certificates without duty payment under Notification No. 1/95, and Rule 156B of the Central Excise Rules, 1944 recognises that satisfactory later production of the certificate entitles the consignor to refund. On that footing, non-production within 90 days did not by itself justify confirmation of the demand, and the assessee's appeal succeeded.

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Issues: Whether duty demand could be sustained for non-production of the re-warehousing certificate within 90 days when the certificate was produced belatedly and the goods had been cleared under Chapter X procedure.

Analysis: The clearance was made to a 100% export-oriented unit without payment of duty under Notification No. 1/95 on CT3 certificates following the Chapter X procedure. The delay was only in producing the re-warehousing certificate. Rule 156B of the Central Excise Rules, 1944 contemplates that where duty has been paid and the re-warehousing certificate is later produced to the satisfaction of the proper officer, the consignor becomes entitled to refund of the duty. On that basis, the demand could not be upheld merely because the certificate was produced after the stipulated period.

Conclusion: The duty demand was not sustainable and the appeal succeeded.

Final Conclusion: The assessee was not liable to sustain the confirmed duty demand on the facts of the case, and the dispute was resolved in its favour.

Ratio Decidendi: Belated production of a re-warehousing certificate does not by itself justify sustaining a duty demand where the governing procedure entitles the consignor to refund upon satisfactory production of the certificate.

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