1997 (3) TMI 246 - AT - Central Excise

Appellate Tribunal denies duty refund due to non-compliance with exemption rules.

The Appellate Tribunal rejected the appeal by M/s. Kirloskar Brothers Ltd. seeking a refund of duty paid under exemption notification No. 211/85-C.E. for ... Refund - Goods cleared on duty payment - Exemption notification Issues:Refund of duty paid under exemption notification No. 211/85-C.E. for goods used in oil exploration activity.Analysis:The appellants, M/s. Kirloskar Brothers Ltd., sought a refund of duty paid amounting to Rs. 30,590 under exemption notification No. 211/85-C.E. The notification exempted goods used in connection with oil exploration activity by ONGC or Oil India Ltd., subject to specific conditions. These conditions included obtaining a certificate from the relevant oil exploration authority, furnishing evidence of usage, and following the procedures outlined in Chapter X of the Central Excise Rules. The appellants failed to avail of the exemption, as they did not produce the required certificate before clearing the goods and did not adhere to Chapter X procedures. The Assistant Collector rejected their refund claim for non-compliance with the notification requirements.The Collector of Central Excise (Appeals) Bombay upheld the rejection, emphasizing that the exemption was contingent upon fulfilling the conditions stipulated in the notification. To avail of the exemption, a certificate had to be submitted to the Central Excise Officer before clearance of goods, and the Chapter X procedures had to be followed. Since the appellants did not meet these requirements, their refund claim was rightfully denied. The exemption was conditional on the goods being used for oil exploration by the designated entities, making procedural compliance crucial.Under Chapter X Procedure, applicants seeking exemption had to submit Form AL 6 to the Central Excise authorities, obtain an L-6 license, and secure a CT-2 certificate for the movement of goods under the exemption. Non-compliance with these procedures could result in the imposition of duty. In cases involving conditional exemptions like the one in question, strict adherence to procedural requirements was deemed necessary, and refunds could not be granted without fulfilling the notification conditions.After considering all relevant facts and legal aspects, the Appellate Tribunal found no merit in the appeal by M/s. Kirloskar Brothers Ltd. The appeal was consequently rejected, affirming the denial of the refund claim due to the appellants' failure to comply with the exemption notification conditions and Chapter X procedures.