Rewarehousing certificate non-receipt under EOU exemption leaves consignor liable for central excise duty

An exemption for clearances to a 100% EOU under Notification No. 1/95-C.E. was available only if the prescribed Chapter X, AR-3, and rewarehousing procedures were followed. Where the rewarehousing certificate was not received within the stipulated period, duty became recoverable from the consignor under the governing procedural scheme. The circular relied on by the assessee did not transfer that liability to the Range Officer, and the earlier Tribunal ruling was distinguishable because this exemption expressly incorporated the procedural conditions. On that basis, non-receipt of rewarehousing particulars sustained duty liability on the manufacturer.

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Issues: Whether the manufacturer was liable to pay central excise duty on goods cleared under CT-3 procedure where the rewarehousing certificate was not received.

Analysis: Notification No. 1/95-C.E. granted exemption to clearances meant for 100% EOU subject to specified conditions, including compliance with Chapter X procedure and the procedures in Rules 156A and 156B as modified by Rule 173N of the Central Excise Rules, 1944. Under this scheme, the consignor was required to send the prescribed AR-3 documents and, if the rewarehousing certificate was not returned within the stipulated period, the duty became recoverable from the consignor. The circular relied upon by the appellant did not shift that liability to the Range Officer, and the earlier Tribunal decision was distinguished because the present exemption was expressly made subject to these procedural rules.

Conclusion: The manufacturer remained liable to pay duty when rewarehousing particulars were not received, and the demand was sustainable.

Final Conclusion: The appeal failed because non-receipt of the rewarehousing certificate attracted duty liability under the governing exemption conditions and procedural rules.

Ratio Decidendi: Where an exemption for clearances to a 100% EOU is expressly subject to compliance with prescribed removal and rewarehousing procedures, non-receipt of the rewarehousing certificate renders the consignor liable to pay the duty.

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