CT-1 certificate does not override exemption notification procedure for duty-free input procurement in export under bond

Duty-free procurement of inputs for manufacture of goods exported to Nepal depended on compliance with the procedure in the applicable exemption notification, not on the mere existence of a CT-1 certificate. The Tribunal noted that Notification No. 45/2001-C.E. (N.T.) governed the relevant period and that departmental knowledge or issuance of CT-1 could not override the prescribed statutory conditions for export under bond. Because the raw materials had not suffered duty and the required conditions were not fulfilled, the claim to exemption on the inputs was unsustainable, and the duty demand and penalty were maintained in favour of Revenue.

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Issues: Whether the assessee was entitled to claim duty-free procurement of inputs on the basis of a CT-1 certificate and export of goods to Nepal, despite non-compliance with the procedure prescribed under the applicable exemption notification.

Analysis: The inputs were procured without payment of duty and were used in the manufacture of goods exported to Nepal. The claim of immunity from duty was examined against the procedural requirements governing export under bond. The Tribunal noted that the applicable notification for the relevant period was Notification No. 45/2001-C.E. (N.T.) dated 26-6-2001, and that the mere issuance of a CT-1 certificate or the Department's knowledge did not override the statutory procedure. Since the raw materials had not suffered duty and the prescribed conditions were not fulfilled, the claim for duty-free treatment could not be sustained.

Conclusion: The assessee was not entitled to exemption from duty on the inputs, and the duty demand and penalty were upheld in favour of Revenue.

Ratio Decidendi: A CT-1 certificate does not by itself confer immunity from excise duty where the conditions and procedure prescribed by the applicable exemption notification are not complied with.

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