2015 (1) TMI 988 - AT - Central Excise

Appeals Granted, Orders Reversed & Compliance Emphasized

The Tribunal allowed the appeals, setting aside the impugned orders and restoring the adjudication order in one case, while overturning the Commissioner ... Proof of export - procedural relaxation for SSI units - Denial of the benefit of the SSI exemption notification - Held that:- dispute relates to acceptance of sales tax documents as proof of export by the exempted SSI units. The Board has clarified that the documents prescribed by the Sales Tax Department viz. H-Form or ST-XXII Form or any other equivalent Sales Tax Form will be accepted as proof of export. In the present case, Revenue has not disputed that the appellant placed sufficient material in the nature of H-Form or ST-XXII Form, Sales Tax Assessment Order as proof of export. There is no dispute that the Hangers were exported with garments by the merchant exporter. Thus, there is substantial compliance of the Board's circular. The Commissioner (Appeals) observed that there is procedural lapse in so far as the goods were not directly exported but through merchant exporter. The Board has clearly clarified that this facility is not available to the supplies made to any other domestic manufacturer who may or may not export its finished products. In the present case, it is observed from the record that the merchant exporter exported the goods which was not disputed at any point of time. - Impugned order set aside - Decided in favour of assessee. Issues Involved:- Classification of Plastic Hangers under Chapter 39 of the Tariff Excise Act- Claim of SSI exemption by the appellants for the years 2000-01 and 2001-02- Dispute regarding the export of goods by the appellants- Interpretation of Circular No.648/39/2002-CX and Notification No.47/94-CE (NT)- Compliance with sales tax documents for export proof- Procedural lapse in direct export requirement- Applicability of exemption for goods exported through a merchant exporterIssue 1: Classification of Plastic Hangers under Chapter 39 of the Tariff Excise ActThe appellants were engaged in manufacturing Plastic Hangers classified under Chapter 39 of the Tariff Excise Act. Show Cause Notices were issued proposing duty demand, interest, and penalty, challenging the appellants' claim of SSI exemption for the mentioned years.Issue 2: Claim of SSI ExemptionThe appellants claimed SSI exemption for the years 2000-01 and 2001-02. The adjudicating authority initially confirmed the duty demand, interest, and penalty, but subsequent appeals led to conflicting decisions. The Commissioner (Appeals) directed the lower authority to quantify the demand, and penalties were set aside in some instances.Issue 3: Dispute Regarding Export of GoodsThe dispute arose regarding the export of goods by the appellants. The Revenue contended that the goods were not directly exported by the appellants but through a merchant exporter, leading to a challenge in availing the SSI exemption benefits.Issue 4: Interpretation of Circular No.648/39/2002-CX and Notification No.47/94-CE (NT)The interpretation of Circular No.648/39/2002-CX and Notification No.47/94-CE (NT) was crucial in determining the applicability of exemption from duty for excisable goods used in the manufacture of export products. The circular simplified the export procedure for SSI manufacturers, specifying conditions for proof of export.Issue 5: Compliance with Sales Tax Documents for Export ProofThe appellants provided Sales Tax Certificate, Chartered Accountant's Certificate, and Sales Tax Assessment Order as proof of export. The Board's circular accepted sales tax documents as proof of export for supplies made to other domestic manufacturers using the goods for export.Issue 6: Procedural Lapse in Direct Export RequirementThe Commissioner (Appeals) noted a procedural lapse as the goods were not directly exported but through a merchant exporter. The facility of using sales tax documents as proof of export was clarified to be unavailable for supplies to other domestic manufacturers not directly exporting goods.Issue 7: Applicability of Exemption for Goods Exported Through a Merchant ExporterThe Tribunal found substantial compliance with the Board's circular regarding the acceptance of sales tax documents as proof of export. The goods were exported with garments by the merchant exporter, leading to the conclusion that the appellants were entitled to the SSI exemption benefits.In conclusion, the Tribunal allowed the appeals, setting aside the impugned orders and restoring the adjudication order in one case, while overturning the Commissioner (Appeals) decision in the other. The judgment emphasized the importance of compliance with circulars and the relevant provisions for availing exemption benefits in excise matters.