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of <h1>Tribunal emphasizes distinction between technical and substantive conditions for Central Excise duties refund adjustment</h1> <h3>M/s. Aerocon Corporation Versus Commissioner of Central Excise, Kolkata-V</h3> M/s. Aerocon Corporation Versus Commissioner of Central Excise, Kolkata-V - TMI Issues:1. Alleged contravention of Rule 19 of Central Excise Rules, 2002.2. Failure to furnish General Bond or Letter of Undertaking for export to SEZ.3. Confirmation of demand for Central Excise duties and penalty imposition.4. Claim of ignorance of law and procedural non-compliance.5. Interpretation of substantive vs. procedural conditions for exemption.6. Applicability of prior permission requirement for adjustment of refunds.Issue 1: Alleged contravention of Rule 19 of Central Excise Rules, 2002The appellant, engaged in industrial fan manufacturing, faced a Show Cause Notice for contravening Rule 19 by exporting goods to SEZ without furnishing a General Bond or Letter of Undertaking. The Adjudicating Authority confirmed the demand for Central Excise duties and imposed penalties, leading to the present appeal.Issue 2: Failure to furnish General Bond or Letter of Undertaking for export to SEZThe appellant exported goods to Falta SEZ without complying with the procedural requirement of furnishing a General Bond or Letter of Undertaking. Despite submitting copies of ARE-1 to the department, the appellant did not respond to the show cause notice or appear for a hearing, resulting in the demand confirmation and penalty imposition.Issue 3: Confirmation of demand for Central Excise duties and penalty impositionThe Commissioner (Appeals) upheld the order confirming the demand for Central Excise duties and penalties imposed by the Adjudicating Authority. The appellant, a small SSI unit, argued that they paid the duty at the insistence of their customers and that their turnover was below the threshold. The Tribunal considered the submissions in light of relevant legal precedents.Issue 4: Claim of ignorance of law and procedural non-complianceThe appellant contended that being a small-scale undertaking, they were not fully aware of the procedural requirements for export to SEZ. They argued that despite procedural lapses, the goods were duly received in SEZ, and compliance failure should not disqualify them from availing substantive benefits. Legal precedents were cited to support this argument.Issue 5: Interpretation of substantive vs. procedural conditions for exemptionThe Tribunal analyzed the distinction between substantive and procedural conditions for exemption, citing the Hon'ble Supreme Court's observations in previous cases. The judgment emphasized the need to differentiate between conditions of substance embodying policy considerations and those of a procedural or technical nature, especially concerning exemptions and permissions.Issue 6: Applicability of prior permission requirement for adjustment of refundsThe Tribunal, aligning with the Supreme Court's decision, set aside the impugned order by emphasizing the importance of distinguishing between technical requirements and substantive conditions. It directed the grant of permission for adjustment of refunds, highlighting that the refusal of permission without justification was a technicality that should not disentitle the appellant from availing benefits.
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