1998 (7) TMI 266 - AT - Central Excise

Appellate Tribunal reviews case on duty clearance, highlights procedural fairness and compliance issues.

SRF. LTD. Versus COMMISSIONER OF CENTRAL EXCISE, MADRAS

The Appellate Tribunal CEGAT, Madras, reviewed a case involving the interpretation of Rule 191BB and Notification No. 33/90-C.E. in a dispute between M/s. ... Natural justice Issues:1. Interpretation of Rule 191BB and Notification No. 33/90-C.E.2. Validity of permission granted for clearance of goods.3. Compliance with duty payment regulations.4. Scope of show cause notice and natural justice principles.Interpretation of Rule 191BB and Notification No. 33/90-C.E.:The case involved the interpretation of Rule 191BB and Notification No. 33/90-C.E. in the context of a dispute regarding the clearance of goods between M/s. SRF Ltd. and M/s. Apollo Tyres. The Assistant Collector of Central Excise at Trichur issued permission for M/s. Apollo Tyres to receive nylon yarn from M/s. SRF Ltd. for manufacturing tires to be exported. However, there was a discrepancy as fabrics were cleared instead of yarn, leading to a duty demand issue. The Commissioner (Appeals) set aside part of the demand based on the interpretation of the Advance Intermediate Licence held by M/s. Apollo Tyres. The Tribunal was tasked with reviewing this interpretation and its application to the case.Validity of permission granted for clearance of goods:The Tribunal examined the validity of the permissions granted for the clearance of goods under Rule 191BB. It was observed that while permissions were obtained from the Assistant Collectors at Trichur and Madras-III Division, there were issues raised regarding the nature of goods cleared and the authority of the Assistant Collector at Madras to grant permission under Rule 191BB. The Tribunal had to assess the legality and adequacy of the permissions granted and their compliance with the relevant regulations.Compliance with duty payment regulations:A significant issue in the case was the compliance with duty payment regulations, specifically under Rule 9(2) of Central Excise duty read with Section 11A. The demand for duty amounting to Rs. 70,65,625/- was contested by the appellants, arguing that duty liability rested with M/s. Apollo Tyres as the consignee who had executed a bond as per the notification requirements. The Tribunal had to evaluate the duty liability and the compliance of the parties involved with the duty payment regulations.Scope of show cause notice and natural justice principles:The Tribunal scrutinized the show cause notice issued to the appellants and the subsequent order-in-original by the Assistant Commissioner. It was noted that the order-in-original went beyond the scope of the show cause notice as Rule 191BB was not mentioned in the notice, leading to a violation of principles of natural justice. The Tribunal emphasized the importance of adherence to natural justice principles and remanded the matter to the original adjudicating authority for a fresh consideration in accordance with the law.This judgment by the Appellate Tribunal CEGAT, Madras delves into the intricate legal issues surrounding the interpretation of Rule 191BB and Notification No. 33/90-C.E., the validity of permissions granted for goods clearance, compliance with duty payment regulations, and the scope of show cause notice in upholding natural justice principles. The Tribunal's detailed analysis and decision to remand the case for a fresh consideration underscore the significance of procedural fairness and legal compliance in excise duty matters, ensuring a thorough review of the facts and legal provisions involved in the dispute between the parties.