Export exemption under Notification 43/2001-C.E. upheld where ARE-3 clearances matched the prescribed export procedure.

Notification No. 43/2001-C.E. was applied to clearances made under ARE-3 for export-related use, where the exporters had filed the requisite Annexure-I applications before the jurisdictional Central Excise officer. The invoices on the job-worker's principal were treated as being only for recovery of conversion charges, and the goods were found to have been cleared in the manner contemplated by the notification. The Revenue's objection based on procedural lapse was rejected, the exemption benefit was held available, and the duty demand and penalty were set aside.

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Issues: Whether the assessee was entitled to the benefit of Notification No. 43/2001-C.E. dated 26-06-2001 in respect of the disputed clearances, and whether duty and penalty could be sustained.

Analysis: The disputed invoices were shown to relate to goods sent under ARE-3 to exporters who had filed the requisite Annexure-I applications before the jurisdictional Central Excise officer. The invoices raised on the job-worker's principal were only for realisation of conversion charges. On the record, the goods were found to have been cleared for export-related use in the manner contemplated by the notification, and the Revenue's objection of procedural lapse was not accepted.

Conclusion: The conditions of Notification No. 43/2001-C.E. dated 26-06-2001 were held to be satisfied, and the assessee was held entitled to the exemption benefit. The confirmation of duty and imposition of penalty were set aside, and the appeal succeeded.

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