Tribunal upholds duty demands on vehicles exported under bond to Nepal based on valid circular

The Tribunal allowed the appeal concerning duty demands on motor vehicles exported under bond to Nepal. The Collector's permission for export, granted based on a circular allowing such exports, was deemed valid. The demands issued after discontinuation of export to Nepal under bond were contested but confirmed by lower authorities. The Tribunal found the show cause notices defective and upheld the validity of exports permitted under the Ministry's circular. The appeal was allowed on merits, supported by a previous Tribunal order regarding a similar demand for tractors.

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Issues:
1. Validity of duty demand on motor vehicles exported under bond to Nepal.
2. Legal backing of permission granted by the Collector for export.
3. Withdrawal of facility for export under bond to Nepal.
4. Compliance with circular issued by the Ministry of Finance.
5. Enforcement of duty demand without proper show cause notice.

Detailed Analysis:
1. The appeal concerns a duty demand on motor vehicles exported under bond to Nepal. The Collector granted permission for export based on a circular allowing exports under bond to Nepal on the condition of sales realization in free foreign exchange. The demands were issued after the Board's instruction discontinuing export to Nepal under bond post a certain date. The appellants contested the demands, which were confirmed by the Asstt. Collector and the Collector (Appeals).

2. The legal representative of the appellants argued that the demand for eight tractors was previously allowed by the Tribunal on the ground of non-maintainability of the demand letter. He contended that the demands for motor vehicles should also be allowed on merits. The appellants had obtained permission from the Collector before the withdrawal of the export facility under bond, and no communication was received regarding the withdrawal until a Trade Notice was issued later.

3. The Respondent argued that the permission granted by the Collector lacked legal backing as a Notification under Rule 13 of the Central Excise Rules was issued after the exports took place. The Board had communicated the withdrawal of the facility to all Collectors, making the exports under the Collector's permission legally questionable. The demands were raised within the statutory period for recovery.

4. The Tribunal found that the show cause notices were defective and that the appellants had a case on merits. The exports were permitted under the Ministry's circular, which was circulated to the trade. The Tribunal noted that if the government intended to withdraw the facility, it should have been done through a circular based on a policy decision. The circular issued by the Ministry should not be invalidated by internal orders of the Board.

5. The Tribunal concluded that the exports permitted by the Collector under bond based on the Ministry's circular were valid. The subsequent issuance of a Notification further supported the validity of the exports. Therefore, the appeal was allowed on merits, in addition to the reasons stated in a previous Tribunal order regarding a similar demand for tractors.

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