Rule 19(2) export exemption applies where goods move directly to a manufacturer-exporter for further manufacture and export.

Goods cleared without duty for export did not lose the benefit of Rule 19(2) of the Central Excise Rules or Notification No. 43/2001-CE (NT) merely because they were routed through a merchant exporter and delivered directly to a manufacturer-exporter for further manufacture and export. The clearance records, export bond, and procedural declarations showed that the goods were removed at the merchant exporter's instance, intended for export, and in fact underwent further manufacture before export. On those facts, the export-oriented scheme was satisfied and exemption could not be denied for lack of first movement to the merchant exporter's premises; the denial was set aside.

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Issues: Whether goods cleared without payment of duty for export lost the benefit of Rule 19(2) of the Central Excise Rules and Notification No. 43/2001-CE (NT) merely because they were routed through a merchant exporter and delivered directly to a manufacturer-exporter for further manufacture and export.

Analysis: The clearance documents showed that the appellant removed the goods at the instance of the merchant exporter, with the consignee named as the manufacturer-exporter, and the goods were in fact subjected to further manufacture and ultimately exported. The required export bond and procedural declarations were also in place. In these circumstances, the removal satisfied the export-oriented scheme contemplated by Rule 19(2) and the notification, and there was no violation merely because the goods did not physically move first to the merchant exporter's premises. The matter was covered by the earlier tribunal view on similar facts.

Conclusion: The denial of exemption was unsustainable and is set aside; the appeal succeeds.

Ratio Decidendi: Under Rule 19(2) of the Central Excise Rules and Notification No. 43/2001-CE (NT), goods may validly move to a manufacturer-exporter at the instance of a merchant exporter for further manufacture and export, and exemption cannot be denied when export, bond compliance, and the intended end-use are established.

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