Export goods cleared under bond fall outside the rule 57CC(1) bar when rule 57CC(6) governs the transaction

Goods removed under bond for export under rule 13 of the Central Excise Rules, 1944 were treated as exported goods and not as exempted goods or goods chargeable at nil rate of duty. On that basis, rule 57CC(1) was held inapplicable, while rule 57CC(6) was taken to govern and exclude the operation of sub-rule (1). The contention that the assessee obtained an impermissible double benefit was rejected because no unlawful additional benefit was shown, so the demand and penalty could not be sustained.

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Issues: Whether goods cleared without payment of duty under rule 13 of the Central Excise Rules, 1944 for further processing and export by another person attracted rule 57CC(1), or fell outside its scope by virtue of rule 57CC(6).

Analysis: The clearance was made under Notification No. 47/94-C.E. (N.T.) dated 22-9-1994 issued under rule 13 of the Central Excise Rules, 1944. Goods removed under bond for export pursuant to that notification were treated as goods exported under rule 13. Following the settled view that such goods are neither exempted goods nor goods chargeable to nil rate of duty, the bar in rule 57CC(1) did not apply. Rule 57CC(6) was regarded as covering this class of cases and as excluding the operation of sub-rule (1). The plea of impermissible double benefit was also rejected as no unlawful additional benefit was shown.

Conclusion: Rule 57CC(1) was held inapplicable and the demand and penalty could not be sustained.

Final Conclusion: The appeal failed and the assessee's position was upheld.

Ratio Decidendi: Goods removed under bond for export under rule 13 of the Central Excise Rules, 1944 are not exempted goods or goods at nil rate of duty, and therefore rule 57CC(1) does not apply where rule 57CC(6) governs the transaction.

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